Taspen's profits decline by 10.5%

Taspen's profits decline by 10.5%

JAKARTA (JP): PT Taspen, the state-owned pension provident
funds for civil servants and employees of state-owned companies,
reported a 10.5 percent decline in net profits to Rp 52.1 billion
(US$ 22.5 million) last year.

Taspen's president, Purwanto Abdulcadir, told the House of
Representatives' Commission VII yesterday that the company's drop
in profits was due mainly to the sharp increase in pension
payments, to Rp 399.4 billion from Rp 334.3 billion in 1994.

"The increase in civil servant salaries, particularly those of
judges, as well as the early retirement of some 5,000 employees
of state-owned PT Telkom, raised our spending sharply last year,"
Abdulcadir said. Pensions are increased in line with salaries.

Moreover, according to Abdulcadir, the increase in spending
was also caused by the new pension payment scheme launched in
early 1994 under which Taspen is obliged to cover 22.5 percent of
total pension payments between 1994 and 1998, with the remaining
77.5 percent funded directly by the state budget.

Until 1993, pension payments were sourced entirely from the
state budget.

He said that Taspen's share of the pension payments will
further increase to 25 percent in 1999, 27.50 percent in 2004 and
33.9 percent in 2009.

"We therefore have to provide a steadily rising amount of cash
for the monthly pension payments. That means that our investments
have to emphasize not only high returns but also liquidity," he
said.

As of Dec. 31 last year, Taspen's total investment fund
reached Rp 9 trillion, which were accumulated from pension and
provident fund contributions from civil servants throughout the
country.

Pensions funds accounted for Rp 6.2 trillion of the total fund
and provident funds for the remaining Rp 2.8 trillion.

He explained that 48.4 percent of the total funds, worth Rp
4.3 trillion, were invested in Bank Indonesia Certificates, 21.9
percent in time deposits, 13 percent in bonds, 12.2 percent in
stocks, 3.3 percent in direct investment, and the remaining 1
percent in other instruments.

He said that the company will take equity participation
through direct placements in five companies this year. Those
companies are PT Pasaraya, PT Continental Carbon Indonesia, PT
Satria Priatama, PT Marga Mandala Sakti and PT Bhineka Multi
Corporation.

He declined to specify the amount of the equity stakes in
those companies, but he said "the total investment may be as
large as last year."

As of last year, Taspen's total direct investments amounted to
Rp 304.1 billion which were put in 14 companies.

Abdulcadir also explained that the number of civil servants
taking part in the Taspen pension fund now totals 4.1 million.
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