State insurance firm told to improve accountability

The Jakarta Post, Purwakarta, West Java

State insurance company PT Jamsostek has so far raised Rp 33 trillion (US$3.5 billion) from social security programs, but 23 million state enterprise workers registered with the schemes still have little access to information about their programs and where the company is investing their money.

Employers and labor unions have frequently urged the government to reform Jamsostek and make its programs more transparent in a bid to provide maximum benefits for workers.

Jamsostek's most recent blunder was to lose the Rp 295 billion it had invested in the now-defunct Bank Global.

Iwan P. Pontjowinoto, who was sworn in as Jamsostek's new president on Monday, said he was preparing a series of new measures to improve the company's accountability and services.

They included, he said, the planned accounting of social security program participants, the promotion of social security programs among workers, the revision of investment policies and improving the transparency of the company's operations.

"We will establish an on-line service for workers, including the issuance of permanent membership cards, so that employees can check their monthly payroll against the social security programs. Their membership will remain permanent although they may move from one company to another," he said on the sidelines of an official opening of a new Jamsostek branch office here on Tuesday.

Many workers are in the dark about their monthly contribution to the social security programs and Jamsostek generally issues only one annual report detailing workers' contributions to the pension fund program (JHT).

The government has been criticized for its failure to contribute to the insurance programs although it receives dividends annually from Jamsostek.

Government Regulation No. 14/1993 stipulates that workers and their employers pay up to 13 percent of their gross monthly salaries in their payroll to cover employee health care, occupational accidents, death and pension funds programs run by Jamsostek.

State Minister for State Enterprises Sugiharto, who also attended the ceremony, said the changes in Jamsostek were not an abrupt decision.

He said the government had began preparing the restructure in December last year after learning that the company's performance was disappointing.

"The old board of directors did not reach their annual target of widening the social security programs' coverage and, even worse, the number of active participants has declined over the last three years. Besides, they were also less-than transparent about how they placed the company's investments," he said.

Of the 23 million workers registered with Jamsostek, only 7.5 million remain active while 70 percent of workers employed in the informal sector have been left unprotected, the minister said.

Sugiharto said Jamsostek should no longer serve as an illegal money making venture for corrupt government officials and political parties.

He had also ordered the new board of directors to improve their services and accountability to the public, especially workers.