Friday, January 26, 2007

Jamsostek should run plan: Minister

National News - January 24, 2007
Ridwan Max Sijabat, The Jakarta Post, Jakarta

Minister of Manpower and Transmigration Erman Suparno insisted Tuesday that state-owned insurance company PT Jamsostek should run the newly proposed dismissal-benefit program.

His statement runs counter to the view of Vice President Jusuf Kalla, who has said that the government could privatize the planned scheme.

Kalla made his comments in a work meeting with the Manpower and Transmigration Ministry here last Friday. Employers, the government and labor unions have agreed to add the dismissal benefit scheme to the spectrum of social security programs carried out by PT Jamsostek.

"It is impossible for the government to entrust the dismissal benefit scheme to private companies because it is part of the social security programs (of PT Jamsostek) to ensure job security among workers," Erman told The Jakarta Post.

"The appointment of Jamsostek as the monopoly holder in providing social security programs is closely connected with the government's obligation to protect workers, as stipulated in the ILO Convention on workers' basic rights."

Like the four current social security programs, he said, the new scheme will be paid for by employers. He said he believed workers at all levels should have the right to receive the dismissal benefits.

Jamsostek director of operation and service affairs Tjarda Muchtar concurred, saying social security programs could not be entrusted to private companies because they were different in nature from commercial insurance.

Besides being obligatory, the social security programs are actually a form of cooperation between white- and blue-collar workers, he said.

"Out of the nearly 12 percent premium for the current four programs, employers contribute 10 percent and workers pay only 2 percent of their gross monthly salaries for the pension benefit program. In this arrangement, white-collar workers give a cross-subsidy to blue-collar workers by paying more in premiums," he said.

He added that Jamsostek was ready to carry out the additional program in accordance with the format set by the stakeholders.

Labor unions, the Indonesian Employers' Association (Apindo) and the government are still discussing the new scheme's format to maximize its benefits for workers and employers.

The stakeholders are still divided over the new program's scope, with the government wanting all workers to receive its benefits.

Apindo wants the new program to cover only low-income workers getting the monthly minimum wage while unions want it to cover workers with monthly wages up to Rp 15 million.


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