Economist: Companies Need To Take Strategic Steps To Ensure Retirement Age Increases Don't Disrupt Operations

Illustration. (Photo: Doc. Antara)

JAKARTA - Jakarta Veterans National Development University (UPN) economist and public policy expert Achmad Nur Hidayat stated that companies need to take strategic steps to ensure that an increase in retirement age will not interfere with the company's operations.

"Companies need to adopt a strategy to ensure that this policy does not have a negative impact on their operations," said Achmad Nur Hidayat, quoted by Antara, in Jakarta, Friday, January 11.

He said that if senior workers are not able to maintain their productivity, then this could affect the company's overall performance.

To overcome this, companies can provide support to senior workers through training programs, workload adjustments, and the provision of access to health services.

In addition to the company's performance, Achmad stated that the increase in retirement age also has the potential to have an impact on the labor market.

This is because with the increasing retirement age, strategic positions in the company will be occupied by senior workers for a longer time.

"This can slow down labor regeneration, reduce opportunities for the younger generation to enter the world of work, and cause career stagnation for those who are already working," he added.

The government has officially increased the retirement age of workers who are participants in the Pension Security (JP) program managed by BPJS Ketenagakerjaan from 58 years to 59 years in 2025 based on Government Regulation (PP) Number 45 of 2015 concerning the Implementation of the Pension Security Program.

The Director General of Industrial Relations and Labor Social Security (PHI JSK) of the Ministry of Manpower (Kemnaker) Indah Anggoro Putri revealed that the increase in retirement age for workers applies automatically in accordance with the provisions of Government Regulation (PP) Number 45 of 2015.

"The increase in retirement age applies automatically in accordance with PP No. 45 of 2015 without any determination from the government first," he explained in an official statement in Jakarta, Friday.

He said that the retirement age in the PP means that the age when participants start to receive pension insurance benefits, not the age of quitting work from the company as stipulated in a work agreement/joint work agreement (PKB) or company regulations.

The first increase in retirement age occurred in 2015 with retirement age increasing from 55 years to 56 years. The next increase occurred in 2019, 2022, and 2025.