State insurance firm told to improve accountability

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.