ANALYSIS AND DEVELOPMENT OF PENSION
FUND CALCULATION USING INDIVIDUAL
LEVEL PREMIUM METHOD BASED ON MOBILE
APPLICATION
Rino Fitriyanto1, Ro’fah Nur Rachmawati2, Derwin Suhartono3
1Computer
and Science Technology, Bina Nusantara University, West Jakarta, Jakarta;
and Science Technology, Bina Nusantara University, West Jakarta, Jakarta.
3Computer and Science Technology, Bina Nusantara University, West Jakarta, Jakarta.
2Computer
Email: [email protected]
Received Month Day, Year; Revised xxxx; Accepted xxxx
ABSTRACT. The increasing number of employees and competition of getting them
makes the companies have to provide programs that makes them comfort to work. The
purpose of research to know the effect of salary increases and the method of payment to
the pension fund payments every month during the period of employment and the amount
to be received by employees after retirement and simplify the calculation by creating an
Android-based applications.This research discusses three salary assumptions that is,the
last salary assumption, average of last 5 years assumption, and average of lifetime salary
assumption. If not using actuarial calculations the possibility of one of the side would be
harmed, for example monthly fee is too high and the total payment does not correspond to
the value of the annuity. The results showed that with a salary above the third assumption,
average of lifetime salary assumption assumption has a stable value per year, so its more
effective for long-term payment. The Company can also calculate quickly with applications that have been made.
Keywords: Individual Level Premium, pension fund, Android, annuity, actuary
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1. INTRODUCTION
Economic growth in Indonesia now is not stable
with ups and downs of the value of the US dollar, the
price of food, fuel, transport, etc. The companies
should be conditioned by the financial market, the
salaries of the employee, and comfort of workers.
Increased competition for qualified employee also
affects the loyalty of the employee. Administration of
pension funds at the end of his tenure is one of the
important steps made for comfort and keeping the
loyalty of the employee.
Since the issuance of Law No. 11 of 1992
regulating pension funds, almost all companies
conducting pension fund program. Each institution has
different actuarial calculation method for calculating
Pension Fund, be it determining premiums (normal
fee) or actuarial liability. Indonesian Society of
Actuaries, Pension Fund Actuarial Practice standards
(2000: 34) describes the actuarial calculation method
in two groups: the accrued benefit cost method and the
projected benefit cost (Nurcahyani and Revelation,
2014).
Employees who follow the pension plan surely
want to get the total value of benefits in accordance
with what they paid and they can calculate the total
dues and dues they pay. Owner of the company
certainly does not want to get losses from pension
payments to its employees because the calculation is
not suitable. This will be more easily achieved if the
employees and owners alike know and can calculate
the total value of pension contributions and pension
benefits. One method used to calculate the pension
fund is the Individual Level Premium (ILP).
Wardhani, Widana, and Tastrawati doing
research on ILP and projected unit credit method in
2014 using three assumptions salary in the calculation
of benefits. Calculations were performed in this study
using data on service table (Futami, 1993b) to create
mortality tables and the value of contributions paid
annually. Wardhani, Widana, and Tastrawati stated
that ILP better method used from the viewpoint of
pension plan participants compared with the projected
unit credit method.
Research on ILP also done by Nurcahyani in
2013. This study used four assumptions in the
calculation of benefits and services using the table of a
numerical simulation. The results of the study
explained that the present value of nomal fee will be
equal to the present value of pension benefits that will
come.
Based on this, the thesis is structured to analyze
and design an Android-based program to calculate the
pension fund using ILP method that aims to facilitate
the calculation and the results are easy to read by the
user. Calculations in this paper uses data service
Indonesian population in 2011 to create mortality
tables and using three assumptions on research
Wardhani, Widana, and Tastrawati.
2. METHODS
Benefit Function
Benefit function is used to determine the
amount of benefits paid during retirement. If Br is
total benefits for active participants from e to r years
old and benefits received each year on participants
aged x years old is bx (Aitken, 1994):
Last Salary Assumption
Last salary at r – 1 years old is:
So, the pension benefit is paid until x years old is:
(1)
Average Salary Last n Years Assumption
Average salary last n years is:
So, the pension benefit is paid until x years old is:
(2)
Average Lifetime Salary Assumption
Average lifetime salary assumption is:
So, the pension benefit is paid until x years old is:
(3)
PVFB
Winklevoss (1993) said that present value of
pension benefits that participants will receive when
they entered r years old.
is:
(4)
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Pic. Scheme of acquiring benefit
Pic. Scheme of premium
According to that scheme, then total payment value is:
According to that scheme, payments were made
during the work from a to r-1 years old is:
Furthermore, annuity benefits projected in the current
year (when participants x years old), so that the
present value of pension benefits when participant is x
years old is:
Assumed that age at first paid pension contributions
equal to the age when entering the work, so a = e
Because
, then
According to this, the equation (5) becomes:
PVNC
Normal cost that counted with individual level
premium is (Aitken, 1994):
Therefore, the calculation of normal cost to the individual level premium wheren participants are e years
old
is:
Basically,
normal cost that paid periodically
when participants x to r years old is used
to pay benefits
which will be received by
participants on retirement. So, present value of the
normal cost when e years old
the value
will be equal to present value of pension benefits
while participants are e years old
. There
fore:
Nilai Akhir Pembiayaan Iuran Normal
If a participant entering pension program at e
years old and still alive when retirement age (r years
old), then total of normal cost that paid by participant
when r years old
with interest rate i is
(Oktiani, 2013):
(5)
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3. DISCUSSION
Mortality table show the chance of death or in this
case retirement rate of emplyees. Mortality table is made
to facilitate the calculation of pension fund. Mortality
table is based on data from the United States Census
Bureau (Indonesian population 2011) with an interest
rate 7.5%.
At this simulation, normal cost and benefits will be
calculated by Individual Level Premium method by adjusting the assumptions and rules in the XYZ company.
An employee was born on May 9, 1990 and joining
the pension program on February 1, 2015 has a basic
salary Rp. 2.925 million, the portion paid by 4.8% and
pension at 56 years old, it can be calculated:
1. Pension benefits
 Pension benefits based on last salary
assumption
From equation (1), can be calculated:


So normal cost that parcitipant paid till
pension age is Rp. 184.174
Normal cost based on last 5 years salary
assumption

So normal cost that parcitipant paid till
pension age is Rp. 160.207
Normal cost based on lifetime salary
assumption
So normal cost that parcitipant paid till
pension age is Rp. 76.108
So total of benefits that participant received
is Rp. 38.105.066
Pension benefits based on last 5 years
salary assumption
From equation (2), can be calculated:
3.
Calculation of total of normal cost
 Total of normal cost based on last salary
assumption
So, total of normal cost that participant
receive
is

So total of benefits that participant received
is Rp. 33.146.273
Pension benefits based on average of
lifetime salary assumption
From equation (3), can be calculated:

Total of normal cost based on last 5 years
salary assumption
So, total of normal cost that participant
receive
is

2.
So total of benefits that participant received
is Rp. 15.746.471
Calculation of normal cost with Individual
Level Premium is:
From equation (5) can be calculated:
 Normal cost based on last salary
assumption
Total of normal cost based on average of
lifetime salary assumption
So, total of normal cost that participant
receive
is
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5

If data above is calculated using the government
rules then:
4.
1.
Normal cost
5.
2.
Total of normal cost
importance of the early retirement of funding
for the sustainability of income in old age.
Application of Information Technology
facilitate pension plan participants to perform
the calculation of normal dues and benefits to
determine the normal dues and benefits.
Address to download the application:
https://www.dropbox.com/s/kirvyyzop8b4jfd/IL
Pcalc.apk?dl=0.
Advice can be given by the author for further research
are as follows:
1. Creating a mortality table with employee data
that lives on every year, compared with people
living in each year.
2. Publish applications to the Android Play Store.
So, total of normal cost that participant
receive
is
_____________________________________________
3.
Normal cost uisng Individual Level
Premium
 Last salary assumption = Rp.
306.958
total of normal cost that
participant
receive
is
Rp.
444.104.451
 Last salary last 5 years assumption
= Rp. 267.012
total of normal cost that
participant
receive
is
Rp.
386.311.109
 Average of Lifetime salary
assumption = Rp.126.847
total of normal cost that
participant
receive
is
Rp.183.520.991
The difference between Individual Level
Premium and Government because of table
mortality and interest rate in Individual Level
Premium calculation.
REFERENCES
Aitken, W. H. (1994). A Problem Solving Approach to
Pension Funding and Valuation.2nd edition.Winsted : Actex Publications.
Anonim. (2015). Iuran Pensiun BPJS 8 Persen, Berlaku
Juli
2015.
03-09.2015
dari
http://www.bpjsketenagakerjaan.go.id/berita/10
67/Iuran-Pensiun-BPJS-8-Persen,-Berlaku-Juli2015.html
Anonim. Mid-year Population by Single Year Age
Groups - Custom Region – Indonesia. 03-092015
dari
http://www.census.gov/population/international/
data/idb/region.php?N=+Results+&T=15&A=sep
arate&RT=0&Y=2011&R=-1&C=ID
Futami, T. (1993). Matematika Asuransi Jiwa Bagian I.
Herliyanto, Gatot, penerjemah. Tokyo: Oriental
Life Insurance Cultural Development Center.
Terjemahan dari : Seimei Hoken Sugaku, Jokan
(“92 Revision).
Nurcahyani, L., & Wahyu, E. (2013). Penentuan Model
Premi Dengan Metode Individual Level Premium
Pada
Asuransi
Dana
Pensiun.Skripsi.Jurusan Matematika, F.MIPA,
Universitas Brawijaya, Malang.
Oktiani, I. (2013). Perhitungan Aktuaria untuk Manfaat
Pensiun Normal Menggunakan Metode Projected Unit Credit dan Entry Age Normal.Skripsi.
Bogor:Institut Pertanian Bogor.
Pressman, R.S. (2010). Software Engineering: a practitioner’s approach. McGraw- Hill, New York,
68.
Wardhani , I G.A.K. K., Widana, I N., & Tastrawati, N.
K. T. (2014). Perhitungan Dana Pensiun
Dengan Metode Projected Unit Credit dan Indi-
4. CONCLUSIONS
Based on the evaluation results obtained, then the
conclusion of the development of this application are:
1. The use of the assumption of final salary total
value of contributions and benefits is greater
than the two other scales, but tends to be
unstable cost to an increase in salary. While the
assumption of average salary during the work
resulted in substantial benefits relatively stable
every year, so the company can avoid having to
finance normal cost due to an increase in salary.
2. The importance of the actuarial calculations
about finances.
3. Open the mindset of the people about the
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viual Level Premium. E-Jurnal Matematika Vol.
3, No.2 Mei 2014, 64
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