Turning Erick’s Brain to Fix BUMN Pension Funds which are Minus IDR 10 T

Jakarta, CNN Indonesia —

A number of State Owned Enterprises (BUMN) following the direction of the Minister of SOEs Erick Thohir related to management due diligence pension fund BUMN. The restructuring instructions emerged due to the management of state-owned companies’ pension funds of minus IDR 9.8 trillion as of 2021.

BRI Corporate Secretary Aestika Oryza Gunarto said that his party welcomed and appreciated Erick’s commitment in relation to the agenda for restructuring state-owned company pension funds.

Aestika claims that currently the performance of the BRI pension fund is very satisfying with a fund adequacy ratio as of January 2023 at 104.99 percent and operating results that have increased by 12 percent (yoy). The total assets reach IDR 25 trillion.

“BRI strictly maintains the governance of pension funds (pension funds) by completing the instruments good pension fund governance. Apart from that, they have also conducted long-term risk assessment studies and made steps to mitigate risks early on,” he told CNNIndonesia.com.

In line with that, PT Pertamina (Persero) is committed to carrying out Erick’s directives regarding the restructuring of the oil and gas company’s pension fund.

“Of course we are ready to carry out the instructions of the Minister of SOEs, we also continue to ensure that our pension fund management is healthy,” said Pertamina’s VP Corporate Communication Fadjar Djoko Santoso.

Previously, Erick revealed that the management of BUMN pension funds is minus IDR 9.8 trillion per 2021. He is worried that this unhealthy condition will become a ticking time bomb for BUMN if it is not intervened.

“There is already a very large deficit of IDR 9.8 trillion in 2021, this is very large, consisting of the majority of the existing SOEs. At least, only 35 percent are healthy, the rest are not healthy,” he said in a working meeting with Commission VI of the DPR, Monday (13/2) ago.

So far, he continued, BUMN pension funds are managed solely by the management of related state-owned companies. Impact, if there is a problem, it is not detected.

He also pays attention to investment management using pension funds. He does not want cases of fraudulent investment placements to happen again, like those with PT Asuransi Jiwasraya (Persero) and PT Asabri (Persero).

“We don’t want this pension fund (pension fund) investment to be a fraudulent investment again,” he said.

Therefore, Erick ordered all SOEs to carry out a due diligence on the management of each company’s pension funds starting September 2022. He requested that the agenda for restructuring pension funds be included in the management contract.

In addition, companies must also make the transformation of troubled pension funds a priority.

“We can see that the lights have started to turn yellow, don’t let there be 6-7 months of issues, even though this is an old case, not a new one,” he explained.

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