Jakarta. The Indonesian government has officially raised the retirement age for workers to 59 years starting in 2025, as outlined in Article 15 of Government Regulation (PP) No. 45/2015 on the Implementation of Pension Programs. This policy aims to address the rising cost of living while ensuring workers can remain productive. However, the decision has sparked mixed reactions, with some embracing it as necessary, while others call for a cautious approach.

Elvira, a private-sector employee, welcomed the change, stating that 59 is still a productive age for most workers. "As long as we remain productive at 59, why not? Life is expensive these days, so extending the retirement age helps us achieve more," she said during an interview in Jakarta’s Sudirman area on Wednesday.

Similarly, Tyas Kuba, another worker, supported the adjustment, suggesting that the ideal retirement age might even be 60. "At that age, we are still healthy. Retiring earlier might just lead to boredom at home. I think 60 is a reasonable retirement age," she said.

Ricky, an employee working in Jakarta's business district, also praised the move, comparing it to neighboring countries like Singapore, which raised its retirement age to 65 in 2022, with plans to allow re-employment up to 70 by 2030. "I support this regulation. In developed countries like Singapore, workers above 50 are still considered highly productive," he said.

Initially, Indonesia set the retirement age at 56 when President Joko "Jokowi" Widodo signed the regulation on June 30, 2015. It increased to 57 in January 2019 and has risen by one year every three years since then. By January 2025, the retirement age will reach 59, with a maximum limit of 65 years planned for the future.

The policy aligns with increasing life expectancy and the need to maintain worker productivity while addressing economic demands. According to Achmad Nur Hidayat, an economist and public policy expert from UPN Veteran Jakarta, Indonesia is not alone in raising its retirement age.

"Countries like Germany have gradually increased their retirement age from 65 to 67 since 2012. France recently raised its retirement age from 62 to 64 in 2023, while Malaysia set its retirement age at 60 in 2013. Singapore is also moving toward 65 by 2030," Achmad said.

Despite these comparisons, Achmad warned about the importance of tailoring the policy to Indonesia's specific conditions, particularly differences in life expectancy and workforce well-being compared to other countries.

"Without proper mitigation steps, raising the retirement age could lead to more negative impacts than benefits," he said.

Achmad said the policy should account for potential challenges faced by older workers, such as health and productivity issues, as well as the potential impact on younger generations struggling to enter the workforce due to slower labor market regeneration.

To ensure the policy's success, Achmad recommended measures such as training programs, improved healthcare access for older workers, and the creation of new job opportunities for younger generations. "The key is finding a balance to avoid social conflicts while ensuring the policy benefits the economy and society as a whole," he concluded.

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