Exploring the Implementation of the Pension Program for Severance Compensation as a Prefunding Mechanism for Post-Employment Benefits: A Reflective Case Study of a Financial Services Company
DOI:
https://doi.org/10.38035/gijea.v4i3.984Keywords:
PPUKP, Post-Employment Benefits, Prefunding, Governance, Risk Management, Stakeholder Trust, Reflective Case StudyAbstract
Post-employment benefit obligations create long-term financial and organizational challenges for companies, particularly when future benefit payments are exposed to liquidity constraints and regulatory changes. Although prefunding has been widely discussed in pension and accounting literature, limited empirical attention has been given to how Indonesian companies implement the Pension Program for Severance Compensation (Program Pensiun untuk Kompensasi Pesangon, PPUKP) as a context-specific mechanism for funding post-employment benefits. This study explores the implementation of PPUKP through a reflective single-case study of a financial services company in Indonesia. Using an exploratory qualitative approach, data were collected through semi-structured interviews with internal stakeholders and analysis of actuarial reports, internal policy documents, tax-related documents, implementation records, and financial data. The findings show that PPUKP was not implemented as a rigid full-funding mechanism, but as an adaptive and partial prefunding scheme shaped by liquidity conditions, funding capacity, regulatory considerations, governance arrangements, and stakeholder perceptions. The program helped reduce direct pressure on operational cash flow, while introducing managerial concerns related to funding adequacy, contribution sustainability, third-party fund governance, and stakeholder trust. This study contributes by positioning PPUKP as an organizational process that negotiates trade-offs between prudence, liquidity flexibility, risk management, governance, and internal legitimacy.
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