Indonesia Financial Services Authority Release New Rules Pension Fund Investment

PENSION FUND - JAKARTA. The Financial Services Authority (OJK) of Indonesia has announced a new regulation concerning the basis for pension fund investment assessments, set to take effect from July 1, 2024.

This new regulation is outlined in the OJK circular letter SEOJK No.4/SEOJK.05/2024, which is an implementation of the mandate from Article 150 paragraph (5) of the Financial Services Authority Regulation Number 27 of 2023 concerning the Operation of Pension Fund Businesses.

The OJK stated that there is a need for refinement in the regulations concerning the basis for the pension fund industry to conduct investment assessments.

Before this new regulation takes effect on July 1, 2024, the current rules regarding the basis for pension fund investment assessments are still regulated in SEOJK Number 9/SEOJK.05/2016 about the Basis for Pension Fund Investment Assessment, Form and Composition and Procedures for Submitting Annual Pension Fund Investment Reports (SEOJK 9/2016).

Based on this SEOJK, there are regulatory substances, one of which regulates the form, composition, and procedures for submitting annual pension fund investment reports. However, in its implementation, this substance has been revoked with the issuance of SEOJK Number 3/SEOJK.05/2019 about the Form and Composition of Periodic Pension Fund Reports, so the substance in SEOJK 9/2016 needs to be revoked.

There are several changes from the latest SEOJK regulation. Firstly, the removal of the assessment basis for savings. Secondly, adding an alternative assessment for types of investment in government securities, corporate bonds, and regional bonds in the form of market value or fair value.

Thirdly, adjusting the calculation of types of investments that use amortized acquisition value, which previously only used effective interest rates.

In addition, two new types of investments were not previously regulated in SEOJK 9/2016, namely regional bond investment types and infrastructure investment funds in the form of collective investment contracts.

"The provisions regarding investment assessments also apply to types of investments that use Sharia principles," said OJK management on the official OJK website, on Thursday (2/5).

16 assessment bases based on the type of pension fund investment

1. On-call deposits at banks: nominal value

2. Time deposits at banks: nominal value

3. Bank deposit certificates: cash value

4. Securities issued by Bank Indonesia (BI): market value and

5. State Securities: market value, amortized cost

6. Shares listed on the Indonesia Stock Exchange (BEI): market value

7. Corporate bonds: market value and amortized cost

8. Mutual funds: market value and net asset value

9. MTN: fair value and amortized cost

10. Asset-backed securities: fair value

11. Real estate investment funds: market value and net asset value