Jamsostek determined to improve performance, service

Ridwan Max Sijabat, The Jakarta Post, Jakarta

State-owned social security insurance company PT Jamsostek marked its 26th anniversary on Friday with a vow to improve its performance and services to workers.

Jamsostek president Achmad Junaidi said his company was facing a daunting challenge to maintain the loyalty of more than 110,000 companies and their 22 million workers -- who had contributed to its assets totaling Rp 24 trillion -- to lure more companies and workers to four social security programs and to manage its assets to maximize client benefits.

A large portion of its assets was generated under its pension scheme. Its other social security programs are: health insurance, occupational hazards and life insurance.

Smarting from a number of mistakes and mismanagement in the past, he said, Jamsostek had been striving to better its services to workers, to be proactive in campaigning its social security programs to employers, workers and labor unions and to be more conscientious in managing its assets.

"To achieve these goals, Jamsostek is improving the quality of its human resources and applying the principles of good corporate governance in running the social security programs and in managing the funds collected from employers and their workers," he said on Friday after the company's 26th anniversary event here.

He said Jamsostek had been carrying out a series of training programs to improve the quality of its human resources, particularly in view of improving client services, and a special financial management program for its social security programs.

Jamsostek was initially founded in 1977 as Perum Astek, and became a limited company (PT) in 1992, under a government policy that changed all state companies from Perum, or public company, into limited enterprises.

Jamsostek has been under fire since 1992 for paying annual dividends to the government, and for serving as a source of funds to government officials and Soeharto's ruling party, Golkar.

Following Soeharto's downfall in May 1998 and the reform movement, many companies and their workers threatened to withdraw from Jamsostek because of financial leakages and the company's lack of transparency.

Junaidi said Jamsostek had moved toward becoming a non-profit trust fund agency, which falls under direct supervision of the President in line with amendment to Law No. 3/1992 on social security programs.

"We fully support Jamsostek's planned change of status into a not-for-profit institution. The new status will benefit workers, because Jamsostek will no longer pay dividends nor taxes to the government and ... the government must make a contribution (to Jamsostek) to show its commitment to protecting workers."

Since 2000, Jamsostek has retained 30 percent of its annual dividends to the government, which funds were channeled toward its professional development and skills improvement programs, and building low-cost apartments for workers and labor cooperatives.

Junaidi, who was formerly Jamsostek finance director for two five-year terms, has predicted that 2004 would be a difficult year not only for investors, but also for the company, as a result of the general elections and their impact on the political climate.

"We are skeptical that Jamsostek will be able to increase membership, because the April to October electoral period will disadvantage most investors and employers," he said.

In regards Jamsostek's preparations in facing the upcoming elections, Junaidi said the management had imposed a strict policy to remain independent.

"We will no longer take sides with any particular political party. We will not support political parties, but the nation's leader and the administration installed by a free, democratic and fair electoral process."

He conceded that many politicians and political parties had been eying Jamsostek for campaign funds, but said that under the new management, Jamsostek would not support any electoral candidate.

Social security program statistics: ----------------------------------------------------------- Year companies workers Jamsostek's assets

(in million Rp) -----------------------------------------------------------

1990 29,562 3,929,307 - 1991 33,536 4,468,984 - 1992 38,462 5,278,760 - 1993 47,302 6,504,210 - 1994 51,601 7,604,673 - 1995 60,049 9,171,090 - 1996 69,366 11,329,704 - 1997 77,772 13,388,056 - 1998 82,632 14,959,138 7,716,823 1999 87,703 16,424,128 10,275,323 2000 90,848 16,469,169 12,627,783 2001 100,005 20,007,254 16,536,666 2002 107,038 21,668,106 21,317,262 2003 110,726 22,454,361 24,022,017

Source: PT Jamsostek