40 Central Java-based BPR establish pension fund

BI/finansial

23/5/2011

Irvin Avriano A.

Bisnis Indonesia

40 BPR establish a pension fund

JAKARTA: As much as 40 Central Java-based rural banks (bank perkreditan rakyat/BPR), together, intend to established an employer pension fund to facilitate employees long-term needs.

Pension Fund Bureau Chief of Bapepam-LK Mulabasa Hutabarat said the initial intention had been submitted to the Capital Market and Financial Institution Supervisory Agency (Bapepam-LK).

"They have declared their intention to establish pension funds, but the intention is only initial assessment, still uncertain what kind of benefit-type will they choose, not final yet," he told the press last weekend.

Benefit-type programs, which can be divided into contribution-plan and benefit-plan, are options that can be applied by the pension funds that have been regulated in the Pension Fund Act No.11/1992.

In these regulation, employer pension fund have right to choose to defined benefit-plan or contribution-plan for some or all of its employees and participants.

Employer pension funds is also a result of the formation of the establishment of pension funds from its founders that can form any kind for its employees, so the employees and employees of the founding partners. The other form of pension fund is financial institution pension fund.

Benefit-plan is a program that its benefit-amount is in an exact/defined numbers so that the variability is at the dues fees to be paid by participants in every term. Meanwhile, contribution-plan have variable benefit so the variable can be changed in accordance with the investment conditions but have dues which amount has been set at the beginning.

Mulabasa suspect BPR would establish an employer pension funds, compared to financial institution pension fund, because the financial institution pension funds can only be established by a bank or general insurance, in accordance with Act No.11/1992.

"Most probably there will be only one BPR will act as the founder and other BPR as the pension fund partner because it is not possible all the BPR became the founder."