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September 10, 2025Open Access

Implementation of Entry Age Normal and Projected Unit Credit Methods in Pension Fund Calculation

THTua Halomoan Harahap MMMaysarah MaysarahUniversitas Islam Negeri Sumatera Utara WAWisam Ch. AlisawiUniversity of Al-Qadisiyah

Key Points

Normal contributions increase with service length under the PUC method, while the EAN method keeps them constant.
Both methods indicate that younger employees lead to lower normal contributions at the time of hiring.
Actuarial obligations rise with longer service duration, with the EAN method showing higher obligations than PUC.
The comparison of these methods is crucial for understanding pension funding at PT. Pasifik Arta Indonesia.

Abstract

Pension funds are financial assets provided to individuals who have retired due to reaching retirement age. PT. Pasifik Arta Indonesia, a company established in Medan for approximately five years, lacks a comprehensive understanding of pension funding, specifically concerning normal contributions and actuarial obligations for employees and agencies using the EAN and PUC methods. This study aims to provide an overview of pension fund calculations at PT. Pasifik Arta Indonesia by comparing the two methods. The results show that normal contributions under the PUC method increase with the length of service, whereas the EAN method maintains constant contributions regardless of service length. Both methods share a common trait: the younger the employee at the time of hiring, the lower the normal contribution. Regarding actuarial obligations, both methods exhibit increasing values with longer service, with the EAN method resulting in higher obligations compared to the PUC method.

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