Government mulls altering Jamsostek's status

Government mulls altering Jamsostek's status

JAKARTA (JP): The government is considering to change the
status of state-owned social insurance company PT Jamsostek into
a non-profit organization as part a reform program in the
country's social security system, Minister of Manpower Bomer
Pasaribu said on Thursday.

Bomer said the change was needed to ensure that all the money
raised by the insurance company was used for the welfare of the
workers.

A non-profit organization would benefit workers more compared
to its present status as a limited liability company, the
minister said, adding that running a business entity to manage
workers' security funds was unwise.

"It's common throughout the world to have a trustee handling
social security funds," Bomer said on the sidelines of a seminar
about reforms in social security, the insurance industry and
pension funds, organized by the Indonesian Chamber of Commerce
and industry.

He said since Jamsostek was wholly owned by the government,
workers and business organizations had little control over how
the company managed their funds.

Bomer said under Jamsostek's present status, the government
had little accountability toward the owners of the funds.

"While the accountability of a trustee is toward its owners,"
he added.

The institution which would replace Jamsostek would still
collect premiums from workers but the funds would be managed by
professionals.

At present, all companies in the country must insure their
workers with Jamsostek, which provides not only insurance
packages but also offers saving schemes.

Bomer said State Minister of Investment and Enterprises
Empowerment Laksamana Sukardi shared his view and that both
sought to meet Finance Minister Bambang Sudibyo for further
discussions.

Bomer said the idea had also gained support from the
International Labor Organization (ILO) and he awaited further
talks between related ministries by the end of the year.

Meanwhile, advisor to the Indonesian Association of Pension
Funds, Kadarisman, said that since Jamsostek was a limited
liability company, it must comply with all the stipulations of
corporate law.

"As a limited liability company, Jamsostek should generate
profits, pay dividends to shareholders and pay taxes to the
government," Kadarisman said.

If the status of Jamsostek was changed, it would no longer be
obliged to pay dividends or taxes to the government, he said.

"So no money should come out except for payments to workers,"
he said.

According to him, Indonesia was the only country to have a
limited liability company managing social security funds.

He also called on the government to subsidize Jamsostek in
times of difficulty as providing social security was part of a
government's responsibility.

Jamsostek president, Ackmal Husin, in his paper suggested that
the company should become an independent agency with special
authority to ensure all companies in the country join its social
security programs.

Ackmal cited similar organizations in the Philippines and
Malaysia have such an authority allowing them to impose a penalty
on companies refusing to join their programs.

He said Jamsostek should report to the president, but under
the supervision of a tripartite agency consisting of
representatives of workers, employers and experts of social
security.

Insurance expert Indra Hattari said social security funds
should be handled by a non-profit agency who would place the
funds in long term government bonds.

He said a council of ministers encompassing those of manpower,
health, social, finance and the governor of Bank Indonesia,
should supervise the agency.

Indra stipulated that the government should fully utilize the
social insurance system as an instrument to collect funds for
long term investments. (03)