Regulation on pension funds questioned
Regulation on pension funds questioned
JAKARTA (JP): The government should lessen the investment
restriction on pension funds to give them more of a chance to
generate high returns on investments, said Chairman of the
Indonesian Association of Pension Funds Kadarisman.
He said here over the weekend that the investment restriction
on pension funds as stipulated by the Minister of Finance's
decree No. 231/93 is no longer relevant today because it is
considered too protectionist.
He said that the government should not be overly cautious on
protecting the pension funds because the country already has a
rating agency on listed bonds and shares, PT Pefindo.
Kadarisman was speaking to reporters during a press conference
held by the Management Center of the Faculty of Economy of the
University of Indonesia in conjunction with its plan to hold a
seminar on pension funds here on Oct. 5 and 6.
The seminar, which will take place at Borobudur
Intercontinental Hotel, will feature several speakers, including
Chairman of the Capital Market Supervisory Board (Bapepam)
Bacelius Ruru, House member A.A. Baramuli and Director General of
Taxes Fuad Bawazier.
According to the decree, the amount of investments made by a
pension fund on shares listed on stock exchanges is limited only
at 10 percent for each issuance. Pension funds are also banned
from investing in shares which are considered to have high risks
such as shares, bonds and other valuable papers listed on the
stock exchanges for less than three years.
Problems
Kadarisman also said over the weekend that the pension funds
also still face other problems such as taxation and the
accounting standard for the financial reports of the funds.
"Those problems affect the disclosure principle of the funds'
financial report," he said, adding that a transparency is needed
to attract more participants to join the funds.
Djunaedi, the chairman of Pension Funds Experts Association,
shared Kadarisman's view, saying that the investment restriction
does not give fund managers ample flexibility to invest.
He said that most of pension funds in the country deposit
their money in banks and the rest could be invested in properties
and equity participation.
"Only around five percent of the total national pension money
is deposited in bonds or shares," he said.
According to Djunaedi, the total amount of money collected by
the country's 367 pension funds is projected to reach Rp 11.4
trillion (US$5.26 billion) as of the end of this year. (05)