The Indonesia Financial Services Authority has issued a policy on pension benefit payments as a follow-up to two Constitutional Court rulings affecting benefits funded from severance pay, long-service awards and compensation for rights. The measure allows those pension benefits to be paid either as a lump sum or in installments, based on the choice of the participant, widow or widower, or child. It also permits pension funds to make lump-sum payments without applying the payout value limits or specific conditions set under earlier OJK rules. Before making those payments under the court rulings, pension funds must first obtain OJK approval for amendments to their pension fund regulations. The policy applies until it is revoked or replaced by new legislation governing pension benefit payments.
OJK2026-07-13
Indonesia Financial Services Authority sets pension benefit payment policy allowing lump sum or periodic payouts after Constitutional Court rulings
The Indonesia Financial Services Authority has set a new policy on pension benefit payments following two Constitutional Court rulings. Benefits derived from severance pay, long-service awards and compensation for rights may now be paid as a lump sum or in installments at the beneficiary's choice, and pension funds can make lump-sum payments without earlier OJK payout limits. Pension funds must first secure OJK approval for amendments to their pension fund rules.