Indonesia’s Financial Services Authority, known by its local acronym OJK, has shut down six pension funds during the first half of this year, according to a report by CNBC Indonesia.
The report, citing Ogi Pratomiyono, chief executive of insurance, guarantee and pension fund supervisory at OJK, says the six pension funds are under the Dana Pensiun Pemberi Kerja (DPPK) programme.
The six pension funds that have been dissolved throughout the first half of 2024 are the LEN Industri Pension Fund, Jasa Tirta II Pension Fund, Natour Pension Fund, Hotel Indonesia Internasional Pension Fund, LKBN Antara Pension Fund, and Rajawali Nusantara Indonesia Pension Fund, Ogi says in the report published on September 23.
Currently, there are two types of pension funds programmes available in Indonesia. The first type, known as the DPPK, is a pension fund set up by employers. Under this programme, the employer is also responsible for the operation, funding and maintenance of the fund. The employer is directly responsible for meeting the minimum funding requirements, maintaining custodian arrangement of the assets, and to cover any shortfall in the required assets of the fund.
The second type of pension fund is the Dana Pensiun Lembaga Keuangan or DPLK, a pooled trust founded by a financial institution such as a bank or insurance company. Individuals and groups of employees can join a DPLK programme, while the legal responsibility for the operations of the pension fund rests with financial institution.
Ogi says the members’ funds under the six DPPK programmes have been transferred to a DPLK programme. “So far, the closure of pension funds has not caused turmoil, and participant rights are still fulfilled. We believe that participant protection must be the main priority,” he says.
OJK spokespersons did not immediately respond to questions from Asia Asset Management.
