Jamsostek claims return on its investment above average

JAKARTA (JP): State social insurance company PT Jamsostek has denied analysts' allegations that it had mismanaged investment funds in 1996, saying the return on its investment during the period was above average.

Ackmal Husin, the finance and investment director of the insurance company, said yesterday the return on investment (ROI) booked by the company was still within the levels of other social insurance companies such as PT Jasa Raharja, PT Asabri, PT Taspen and PT Askes.

Ackmal said the company's return from its total investment was Rp 579.8 billion in 1996, or 15.84 percent, and that the amount would have been higher if December 1996's additional investment was included and if the company did not pay taxes in previous years.

The company has been exempt from paying tax to the government since 1996.

Jamsostek has been under tight public scrutiny following a report on the use of about Rp 3 billion of the company's funds to help pass the controversial Labor Law at the House of Representatives last year.

Econit Advisory managing director Arif Arryman said last December that the ROI of the social security company was only 11.6 percent in 1996, much lower than the average deposit interest rate of 15 percent during the period.

According to Econit's calculation, Jamsostek's investment in 1996, totaling Rp 4.36 trillion, should get a ROI of Rp 581.2 billion, or Rp 77.3 billion higher than the Rp 503.9 billion actual return as stipulated in a simulation by Econit.

Ackmal said that its total investment was Rp 4.35 trillion in 1996, not Rp 4.36 trillion as estimated by Econit. About Rp 2.91 trillion or around 66.8 percent of the total was invested in time deposits, Rp 637.20 billion (14.6 percent) in Bank Indonesia certificates, Rp 388.48 billion (8.9 percent) in bonds and the rest in promissory notes, direct equity, property and the stock market.

He said the time deposits and Bank Indonesia certificates had varying rates of interest, depending on their terms.

He said 10 percent of the company's profit was given to workers in the form of their premium's interest while 5 percent was used to run the company's operations and other costs.

Ackmal said the company's financial performance was audited annually by the Development Finance Comptroller, the government's audit agency.

The company has received a qualified opinion from the Development Finance Comptroller 12 times and no opinion twice since it was founded in 1978. (rms)