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					PENSION FUND AND OLD AGE INSURANCE
   FOR GOVERNMENT EMPLOYEES:
    BEST PRACTICES OF INDONESIA




   YOGYAKARTA, AUGUST 19-22, 2004

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          14th ASSA Board Meeting, 2004
                      COMPANY FROFILE



A. HISTORICAL BACKGROUND
The company was established on April 17, 1963 as State Enterprise of
Saving Fund and Insurance for Government Employees or PN TASPEN.
In 1970, the organizational status was changed into Public Enterprise
called PERUM TASPEN. Later on, in 1981 the company’s status has
been changed as a State Own Limited Company which is called as
PT TASPEN (PERSERO).




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                    14th ASSA Board Meeting, 2004
B. PROGRAMS
PT TASPEN (PERSERO) has two programs, namely Pension Program and
Old Age Insurance Program (THT Program).

1. PENSION PROGRAM
  In 1987 Government appointed the Company to manage the Pension
  Payment for pensioners of Government Employees, started with three
  provinces of Bali, West and East Nusatenggara, and continued in April
  1990 for the rest of the provinces.
  The pension payment program is managed by pay as you go system
2. OLD AGE INSURANCE PROGRAM
  The Old Age Insurance Program consist of Endowment Insurance,
  Whole Life Insurance for participants and spouse, and Term Insurance
  for eligible children.

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                   14th ASSA Board Meeting, 2004
C. CONTRIBUTIONS
  * Pension Program: 4.75% of monthly salary
  * Old Age Insurance Program (THT Program): 3.25% of monthly salary.
§D. PARTICIPANTS
   PARTICIPANTS OF PENSION AND THT PROGRAM 1999-
                     2004 (JUNE)

   YEAR    PENSION PROGRAM             THT PROGRAM

   1999          1,742,348                4,028,858

   2000          1,778,054                4,020,464

   2001          1,810,298                4,021,015

   2002          1,848,569                3,994,854

   2003          1,875,812                3,970,088

   2004          1,890,732                3,661,186


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                  14th ASSA Board Meeting, 2004
         FUNDING OF PENSION & OLD AGE INSURANCE PROGRAMS
         FUNDING OF PENSION & OLD AGE INSURANCE PROGRAMS


     GOVERNMENT
                                   Salary of Government Employees

                                                                       8% Salary



                                      4.75% Salary                    3.25% Salary
        Dir.Gen. Of                  Contribution for
          Budget                     Pension Program                Old Age Insurance



79% of Pension                                                        PT TASPEN
                                      Pension Fund
Benefits
                 (Managed by PT TASPEN          21% of pension
                 as a Separate Assets)          Benefit
                                      PT TASPEN                        Benefits

                         Pension Payments    Current Cost Financing
         Pensioners
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                             14th ASSA Board Meeting, 2004
           DEVELOPMENT OF PENSION PROGRAM

A. PAY AS YOU GO SYSTEM

  § Basically the pension payment program is managed under pay as you go
   system and regulated under the law No. 11/1969.
  § Under such system, the accumulation of pension contribution is
   administratively managed by PT TASPEN and called as “Government
   Employees Pension Fund”.
  § There is still no contribution from the Government as an Employer.
  § Before 1994 the pension payment was managed fully under pay as you
   go system and 100% allocated into the Government Spending.



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                     14th ASSA Board Meeting, 2004
           DEVELOPMENT OF PENSION PROGRAM

B. FULLY FUNDED SYSTEM

 § Private Pension Fund has been operated under the Fully Funded System.


 § In order to have an equal treatment between Private and Public Pension
   Fund (Pension Fund for Government Employees) as well as to promote
   the increasing of the Participants’ welfare, there will be a great
   consideration to manage the Public Pension Fund under the Fully
   Funded System.




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                      14th ASSA Board Meeting, 2004
         SELECTED FINANCIAL FIGURES
     PENSION PROGRAM 1999-2004 (Billion Rp.)

               PREMIUM       INVESTMENT        CLAIM
  YEAR                                                    TOTAL ASSET
                INCOME         INCOME         PAYMENT

   1999         7,206.06       2,615.49        8,599.09     10,835.28

   2000        10,515.61       1,264.60       11,536.38     10,299.62

   2001        13,132.67       1,351.53       14,562.96     10,119.44

   2002        13,453.70       1,518.06       14,890.64     10,521.76

   2003        16,379.93       1,522.97       17,398.01     11,075.31

  2004*)        9,828.86        552.64        10,092.40     12,622.45

*) As of June 2004



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                     14th ASSA Board Meeting, 2004
ASSET ALLOCATION OF PENSION FUND AS OF JUNE 2004


           ASSETS                AMOUNT (BILLION RUPIAH)          %
 TIME DEPOSIT                                        6,452.85     59.59%
 BOND                                                3,933.41     36.32%
 SHARES                                                 27.11      0.25%
 DIRECT INVESTMENT                                     381.82      3.53%
 PROPERTY                                                34.13     0.32%
 TOTAL                                              10,829.32    100.00%

            ASSET ALLOCATION OF PENSION FUND AS OF JUNE
                               2004 0.32%
                        3.53%

                         0.25%

            36.32%


                                                       59.59%




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                     14th ASSA Board Meeting, 2004
            SELECTED FINANCIAL FIGURES
               THT PROGRAM, 1999-2004
                           (Rp. BILLION)
                                       ITEMS
  YEAR
               PREMIUM     INVESTMEN            CLAIM
                                                          TOTAL ASSET
                INCOME       INCOME            PAYMEN

   1999          525.09     1,266.67           1,428.66     5,647.73

   2000          543.30      673.31            1,049.05     6,051.30

   2001         1,375.17    1,067.74           2,237.28     7,816.64

   2002         1,391.36    1,451.95           2,526.40     9,851.36

   2003         1,683.36    1,575.26           2,833.80     11,896.51

  2004*)         841.98      659.30            555.85       12,744.16

*) As of June 2004




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                     14th ASSA Board Meeting, 2004
    ASSET ALLOCATION OF THT FUND AS OF JUNE 2004


          ASSETS                 AMOUNT (BILLION RUPIAH)       %
TIME DEPOSIT                                       3,182.97    27.09%
BOND & MTN                                         8,352.25    71.08%
SHARES & MUTUAL FUND                                 149.18     1.27%
DIRECT INVESTMENT                                     66.76     0.57%
TOTAL                                             11,751.16   100.00%

             ASSET ALOCATION OF THT FUND AS OF
                        JUNE 2004



                            1%
                          1%
                                                27%




              71%



                    BOND & MTN




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                14th ASSA Board Meeting, 2004
                     SERVICE EXCELLENT



§ Best Practices
 Taspen since long time ago has implementing best practice which is
  called as 5 (Five) Stars Principles of Services, i.e. Right to Man,
  Right to Time, Right to Amount, Right to Place, and Right to
  Administration.

§ One Hour Service
 Related to the Principle of Services, Taspen has implementing a One

 Hour Service for all kind of Claims.




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                    14th ASSA Board Meeting, 2004
                    SERVICE EXCELLENT


§ Service Without Any Charge
 Taspen has been known through out the country for many years as a
 Services Company without any fee or tips for all kind of services.


§ Branch Offices and Service Points
 Taspen Provides 39 Branch Offices and More than 4000 Service Points
 all Over Indonesia.




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                   14th ASSA Board Meeting, 2004
 FUTURE DEVELOPMENT: NEW VISION, MISSION AND
                 VALUES

§ Vision
  Becoming Taspen as a World Class Pension Fund and Old Age
  Insurance Services with the characteristics of Clean, Healthy and
  Proper through the 5 (Five) Stars Principles, i.e. Right to Man, Right to
 Time, Right to Amount, Right to Place, and Right Right to
 Administration.

§ Mission
 Realizing the Customers’ Happy Future Days through the Operational of
 Pension Fund and Old Age Insurance Professionally and Accountable
 Based on High Standard of Ethics and Integrity.

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                   14th ASSA Board Meeting, 2004
 FUTURE DEVELOPMENT: NEW VISION, MISSION AND
                 VALUES

§ Values
  Growth
 Ethics
 Professional
  Accountable
  Integrity




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                14th ASSA Board Meeting, 2004
      FUTURE DEVELOPMENT: SEVERAL STRATEGIC
          PROBLEMS ON PENSION PROGRAM


§ There is still an inconsistency of the Government Policy in the
    implementation of Pay As You Go System for the pension payment
    program;


§ There is a low commitment to develop the Pension Program under Fully
    Funded System.


§ There is still an inconsistency in the implementation of National Social
    Security
.

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                     14th ASSA Board Meeting, 2004
          FUTURE DEVELOPMENT: REPOSITION



In order to prepare Taspen as a World Class Company, in the early 2004
has been launched a Reposition Program, which consists of:


§ Back to Basic
§ Safeguard the going concern of the Company
§ Continuing the Company Growth
§ Developing a Senior Citizen Center
§ Assisting the Country to be Indonesia which has characteristics of
 justice, fairness, clean, and prosperous.


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                    14th ASSA Board Meeting, 2004
       FUTURE DEVELOPMENT: INCREASING THE
             PARTICIPANTS’ WELFARE

§ Under the current Reposition Program, Taspen is still promoting the
 Government as an Employer to pay its contribution as well as Past
 Service Liability.
§ The response of the Government has been covered by the Proposed
 National Social Security Act, in which Taspen will likely operate the
 additional programs, such as:
 # Work Accident Insurance;
 # Education Insurance; and
 # Death Insurance.



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                      14th ASSA Board Meeting, 2004
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14th ASSA Board Meeting, 2004

				
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