Track: Financial Engineering

Abstract

The welfare of workers at retirement age is an important factor in ensuring fulfillment of needs in old age. One of the ways to achieve this welfare is by participating in a pension fund program, which is a program designed to provide pension benefits to employees in order to ensure the fulfillment of workers' needs during retirement. Pension fund management can be done using the actuarial calculation method. This study aims to calculate the pension fund financing in which the methods used are Entry Age Normal and Attained Age Normal methods which are two of the four parts of Projected Benefit Cost Method. Based on this research, the amount of pension contribution, actuarial liability and pension benefit is obtained from each method. The normal contribution with Attained Age Normal method increases every year with the most significant increase occurring at the age before retirement, while with Entry Age Normal method, the pension contribution increases at the beginning and then continues to decline until retirement age. The pension benefits of both methods are both greater than the proportion of salary for pension benefits. Therefore, Entry Age Normal is recommended for the participants of  pension fund program.