Indonesia's Pension Fund Industry Faces Limited Growth Prospects

Dependency on Formal Sector Workers

The Indonesian pension fund industry's growth is heavily dependent on the formal sector workforce. As of 2025, the industry's participation rate remains low at around 5% of the population. Experts warn that this dependency poses significant risks to the industry's growth prospects.

Expert Opinions on Growth Prospects

Nailul Huda, Director of Digital Economy at Celios, stated that increasing voluntary participation will be challenging as it currently stands at only 5.5 million out of nearly 30 million participants. He projects that growth will be limited to 6-8% in 2026, primarily driven by mandatory contributions from formal sector workers.

Factors Influencing Growth

1. Economic Conditions: Economic slowdowns and layoffs could negatively impact growth
2. Mandatory Contributions: Growth is largely driven by mandatory contributions from formal sector workers
3. Investment Returns: Contribution from investment returns will play a crucial role in overall growth

Current Industry Statistics

As of October 2025, the total assets of the pension fund industry reached Rp1,647.49 trillion, representing a 9.82% YoY growth. The breakdown shows:

• Voluntary pension program assets: Rp400.44 trillion (5.52% YoY growth)
• Mandatory pension program assets: Rp1,247.05 trillion (11.28% YoY growth)

Challenges and Future Outlook

The industry faces challenges from both economic conditions and structural limitations. Ogi Prastomiyono, Head of Insurance, Guarantee and Pension Fund Supervision at OJK, reported the current asset values and growth rates. The industry's growth trajectory will depend on various factors including economic stability, employment rates, and investment performance.