Eleven Defined Benefit Pension Funds disbanded
Reporter: Tendi Mahadi | Editor: Barratut Taqiyyah Rafie
JAKARTA. The trend of disbanding pension funds emerged last year. This occurs in the employer pension fund (DPPK) segment that operates a defined benefit pension plan (PPMP).
According to the Director of Supervision of Pension Funds and BPJS Ketenagakerjaan of the Financial Services Authority (OJK) Asep Suwondo, 11 PPMP pension funds disbanded during 2016. So that the total number of DPPKs running the PPMP program decreased from 191 entities at the end of 2015 to 180 entities as of December 2016.
In fact, the decline in the number of PPMP pension funds in 2016 was the largest compared to the previous period. OJK records. During 2014 the number of PPMP dapen disbanded only three entities. Then in 2015, the PPMP dapen amount dissolved into four entities.
According to Asep, there are several reasons behind the dissolution of the defined benefit pension fund. The most common is the financial condition of the pension fund founder. As a result of the founders financial difficulties, it has a systemic impact on managed pension funds.
Under such conditions, a pension fund will be included in the level III category of the funding quality profile. This means that the amount of wealth owned is lower than the liabilities. “So generally employers have difficulty funding and are unable to fix the financial conditions of the pension funds,” said Asep.
The second reason is efficiency. Asep said, some founders only had a limited number of about 20 participants. In fact, managing pension funds requires costs. With a small number of participants, pension fund management is deemed ineffective. Because of that, he said, a number of these dapen chose to disband.
The presence of the BPJS Ketenagakerjaan pension program also affects the number of DPPKs operating. A number of DPPK founders who are also business entities have chosen to concentrate on the former PT Jamsostek because it is mandatory.
But not all of the PPMP DPPK were completely disbanded. The reason is, the DPPK PPMP also transformed into a DPPK that runs a defined contribution program (PPIP). “Some of them have transferred the pension program to DPLK for efficiency reasons,” said Asep.
This year, Asep assessed that the potential to decrease the number of DPPK PPMP depends on a number of factors. Especially about the financial health of the founders, it can maintain the viability of the pension fund.
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