Pension funds get more protection

Pension funds get more protection

JAKARTA (JP): Ministry of Finance Mar'ie Muhammad issued three new regulations on the activity of pension funds yesterday to give stronger protection to pension fund members.

One of the rulings is to annul the investment restriction on listed shares and commercial paper in land and property and the second is to require the pension funds to submit their audited annual reports to the finance minister no later than six months from the end of every book year.

Agus Haryanto, the Ministry of Finance spokesman, said that if pension funds are late in submitting their financial reports, they will be fined Rp 100,000 (US$46.5) for each day delayed.

The third ruling is to regulate the financing of pension funds, which base their activities on fixed benefits.

Agus said that the investment ceilings in shares, commercial papers, land or building are totally abolished under the new rulings but that the government has asked them to be more careful in managing the risks of their investments.

The investment ceiling for shares listed on Indonesian stock exchanges was previously set at 10 percent of their assets per issue.

The ceiling for investment in commercial papers was one percent per issue while for a piece of land or per unit of buildings was two percent of the total assets.

Agus said the introduction of the new regulations is aimed at providing stronger protection for members of pension funds while giving them more freedom to invest their money. (hen)