Indonesia is facing the phenomenon of aging before wealth, a phenomenon characterized by an increase in the number of elderly people who are aging before achieving a high level of well-being. Currently, there are approximately 35 million people aged 60 and over (almost 12% of the population), and this number is projected to increase to 67 million, or approximately 20% of the population, by 2045. However, social protection for the elderly remains very limited. Approximately 88% of the workforce does not have pension rights, while only a small proportion of the elderly receive pension benefits. This situation leaves the majority of elderly people still dependent on work or family support to meet their living needs.
This study develops policy recommendations to strengthen Indonesia's old-age security and pension system in support of its accession to the OECD. These recommendations include expanding Old-Age Security (JHT) and Pension Security (JP) coverage to non-wage workers and micro-enterprises, with subsidies in line with fiscal capacity, lowering the threshold for JP membership exemptions to include small businesses, and gradually increasing JP contributions to ensure the sustainability of the pension system. These three measures are considered complementary and need to be implemented in stages to expand the scope of social protection while maintaining fiscal sustainability.