Indonesia’s Worker’s Social Welfare is governed by Law 3/1992 on Worker’s Social Welfare as also known under the acronym ''Jamsostek''. Most recently some parliament members have proposed to amend this law. Schedule for the amendment has not been set and needs to be carefully reviewed as this will have relevance with the laws on national health insurance.

Since its enactment, Law 3/1992 has been considered controversial, as the accumulated funds is managed by the state-owned company PT Jaminan Sosial Tenaga Kerja (PT Jamsostek). Which means that the state decides on how the funds are used for investment and where the profits should go to, without any direct considerations to the interests of the workers that have made the contributions. Therefore the main purpose of the amendment will be to replace the state owned enterprise that manages the funds and transfer it to a trust fund. Albeit that trust funds originate from the common law system, however application may be given by strengthening its legal basis. Fundamentally a trust fund will legally manage all the transferred assets from Jamsostek to become assets of the workers that have participated in the Jamsostek program, entitling them to all the assets’ profits and benefits.  

The new law would establish a trustee that sets the policies and generally supervises the implementing body. The trustee will have the authority to issue new regulations in managing the funds, as well as implementation of Jamsostek programs. In addition thereto it will establish investment and audit committees. These committees will bear the tasks of research and advice on such aspects as the investment, management and audit by the trustee and implementing body, which include the appointment of its management and members.

If you need clarification or legal advice on this issue, please contact Lubis Ganie Surowidjojo at lgs@lgslaw.co.id