Govt reviews limits on use of pension fund
Govt reviews limits on use of pension fund
JAKARTA (JP): The government will soon ease investment
restrictions imposed on pension funds in a bid to further
stimulate capital market activities, says an official.
The chairman of the Capital Market Supervisory Agency
(Bapepam), Bacelius Ruru, said yesterday the planned revision is
expected to further raise pension funds' portfolio investments.
"I hope the Ministry of Finance will soon issue the new
investment policy," he told business executives at a seminar on
the business strategy of pension funds.
Ruru said his office and the Directorate General of Financial
Institutions have reached an agreement on the need of easing the
investment restrictions. "It is now only a matter of time," he
said.
The government imposed a ruling on investments of pension
funds in February last year in an effort to protect the interest
of their members.
The present ruling allows pension funds to invest only in
securities (stocks and bonds) which have been listed on stock
exchanges for at least three years. It means that pension funds
are prohibited from buying stocks at the primary market, or
before shares are listed.
An executive of the pension fund of the state-owned Bank
Negara Indonesia (BNI) said yesterday that the government has
given unequal treatment to pension funds.
Primary market
"Restricting pension funds from buying shares during the
primary offering period is not realistic," the executive said at
the seminar.
He explained that shares available at the primary market are
not only cheaper but also have better quality than those already
listed.
Pension funds have lost the opportunity to get higher capital
gains due to the restrictions, he said.
"There are a number of good stocks being offered at the
primary market but we cannot buy them," he said, adding that the
35 percent ceiling given to pension funds to invest in securities
(shares and bonds) is also too small.
Securities analysts earlier also called on the government to
allow pension funds to buy stocks or bonds at the primary market.
The existing ruling also restricts pension funds from buying
more than 10 percent of shares or bonds issued by a single listed
company.
Bambang Subianto, the director general of financial
institutions, said the investment restrictions are still needed
to protect pension fund members.
He said that pension funds' investments should be prudently
managed so that their members will be able to get their pension
benefits as promised.(hen)