Jamsostek's net profit on the rise

Ridwan Max Sijabat, The Jakarta Post/Jakarta

State-owned social security company PT Jamsostek, has booked a net profit of Rp 2.55 trillion (US$280.40 million) from its investments in the first nine months of this year.

Jamsostek president Achmad Djunaidi said here on Friday that the net profit represented 87.60 percent of the company's 2004 target and he was optimistic that the company would be able to reach the targeted profit of Rp 2.91 trillion this year.

He added that the net profit indicated that the investment the company has conducted so far has been in line with regulations and had given an optimum result.

Jamsostek's net profit fell by almost 95 percent to Rp 535.2 billion in 2003 from Rp 982.6 billion in 2002 due to the country's prolonged economic crisis and the recent change in the company's accounting system.

Djunaidi explained that Jamsostek reaped a significant profit from investment in the stock market as well as from the bond market.

"We harvested a total of Rp 422 billion from the stock market and Rp 1.18 trillion from bonds," he said.

In line with the ongoing review of the social security programs and the planned development of PT Jamsostek into a trust fund institution, the company's annual income would be placed in providence funds that would be paid to workers soon after they retire because a bigger part of the investment comes from the providence funds.

"Despite its current status as a state-owned company, Jamsostek will no longer pay dividends and taxes to the government and, instead, will accumulate its annual profits as part of its assets to help improve the welfare of workers," he said.

Jamsostek's assets are currently Rp 33 trillion collected from 23 million of workers employed in the formal sector, to provide workers with health care, life insurance, industrial accident coverage and the providence funds program.