JHT Controversy Stirs Concerns Among Your Employees? Here's the Updated Guide for HR

JHT Controversy Stirs Concerns Among Your Employees? Here's the Updated Guide for HR

We've heard about the plan of changing the JHT or Jaminan Hari Tua policy. JHT is usually paid to an employee no later than a month after an employee was laid off or resigned, but today our government is considering an adjustment in the regulation. The plan definitely gone viral on social media.

Previously, it was announced that as of May 2022, JHT or Pension Plan will only be payable to the employee when the employee reaches the age of 56, permanently disabled, or died. But a new development of the situation implies that the Ministry of Manpower is still on the process of revising the regulation together with Labour Union.

JHT is a program under the Ministry of Manpower (Kemnaker) managed by the Social Security Administering Agency (BPJS) for Employment. The Minister of Manpower Ida Fauziyah opened up about the reasons behind this plan. According to her, this is in line with the goal of JHT, which is to protect participants when they retire and are no longer productive. If it can be disbursed at productive age, then the program won't match with the purpose of retirement protection.

She argued that, since the beginning, the JHT program was prepared for the long term, because the short term program already existed. For workers experiencing undesirable situations, such as accidents, permanent disability, death, being laid off, or moving abroad, all of them already have social security rights with special provisions. If the benefits of JHT at any time can be claimed 100 percent, then of course the goal of JHT will not be achieved.

The good news is, in the original plan, 30 percent of your total JHT can be disbursed early when you want to take a home ownership loan or for retirement preparation reasons (provided that you've been in the JHT plan for more than 10 years).

What if employees are laid off and need fast funds? Previously, we know that the old JHT, that can be received short time after the laid off/resignation, is perceived as the "safety net" for the newly jobless. Good news is, for such situations they can take advantage of the Job Loss Guarantee from BPJS Ketenagakerjaan.

So, with the right understanding of the pension plan, the adjustment on JHT regulation should not be a huge issue among the employees. As the HR, you should also equip employees with various financial literacy education programs to help them prepare for the future. While waiting for the announcement of the official revision, it should be noted that the current reference for disbursement of JHT still refers to the old regulations. This means that BP Jamsostek participants do not have to wait for the age of 56 to withdraw their JHT funds.

Managing payroll is indeed a commitment that comes with its own challenges, especially when there are new regulations that demand adjustments from us. Don't worry, KPSG can help calculate your employee payroll according to existing.

*Article is updated on 21 March 2022

You May Also Read: 

1. How to Build Fruitful Career to Boost Employee's Retention

2. Winning Your Next Hiring Interview: An HR PoV