Elvyn G Masassya, president director of BPJS Ketenagakerjaan.
(GA Photo/Muhamad Al Azhari)

Jakarta. From July 1, the Social Security Administration Body for Employment, or BPJS Ketenagakerjaan, will monitor companies operating in Indonesia to ensure registration of employees into the compulsory social security scheme, the agency’s chief said on Tuesday.

“In the past, when we were still called Jamsostek, we didn’t have the authority to enforce the law,” said Elvyn G Masassya, president director of BPJS Ketenagakerjaan.

“Starting on July 1, we will have the authority to make visits and scrutinize naughty companies, and proceed with legal action. Some penalties for the non-compliance companies could be they have their licences revoked or even an eight year jail term and Rp 1 billion [$76,000] fine,” said the executive who has lead the former state enterprise since 2012.

The government has made it mandatory for companies to register employees, including expatriates, with the Employee Social Security program, regardless of programs and policies in place in their home countries.

“We will cooperate with the provincial government, or district municipalities. They are able to revoke business licences if necessary. We can also make recommendations to other government agencies to revoke legal papers of the offenders. For example, we can recommend for their passports or driving licences to be revoked,” Elvyn said.

He added that the government body has established a supervising unit.

“We already have 127 supervisors, who will go in to the field starting July 1. They have been trained and certified,” he said.

BPJS Ketenagakerjaan was previously known as Jamsostek, or the state-pension fund.

After Jan. 1, 2014, the agency merged with two state pension funds — Asabri, servicing police, military and defense and Taspen, a civil servant fund.

The surviving entity was renamed BPJS Ketenagakerjaan and it covers three of the four previous services: occupational accidents, saving for old age and death insurance.

The health insurance service has been adopted by BPJS Kesehatan, formerly Askes Indonesia.

From July 1, BPJS Ketenagakerjaan will acquire full legal status as a non-ministry government agency, and will be supervised directly by the president.

The agency will begin providing occupational accident and death insurance service to civil servants, the police and the military.

Investment

The body is the largest institutional investor in Indonesia. During the interview, Elvyn also shared the social security body’s ambitious target to book up to Rp 500 trillion worth of assets under management by 2019, well up from last year’s Rp 187 trillion.

BPJS Ketenagakerjaan last year registered 16.7 million members and from the Rp 187 trillion funds it managed, it disbursed Rp 18.6 trillion in investment yields.

Employees, along with the employers, pay in to the social security scheme provided by BPJS Ketenagakerjaan, but the funds are managed by the fund before being disbursed to the claimant when needed.

BPJS Ketenagakerjaan, like other insurers and pension funds, invest funds collected from members in a number of diverse portfolios.

Elvyn says BPJS Ketenagakerjaan has a specific formula for investment strategy.

“About 18 percent to 22 percent we typically place in stocks; 42 percent to 46 percent in high-grade bonds; 28 percent to 32 percent in term deposits; about 5 percent to 10 percent mutual funds and the remainder in property and private placement [in a specific company or project],” Elvyn said.

“But as to whether we will go for the upper or bottom ceiling for each of them, it depends on the macro-economic conditions and market situations,” said Elvyn, who is the former corporate secretary of Bank Negara Indonesia and director at Bank Permata.

This year, Elvyn said assets under management are targeted to rise to Rp 220 billion and registered members to soar to 22 million. BPJS Ketenagakerjaan will also deploy a unique strategy to boost investment in property.

Elvyn said the government body plans to invest about Rp 20.4 trillion for development of affordable housing; rental apartments (Rusunawa) and lower cost apartments (Rusunami).

He said BPJS Ketenagakerjaan plans to build a combined six Rusunawa and Rusunami, which will be spread across North Sumatra, the Greater Jakarta Area, throughout Java and South Sulawesi.

“Being a member of BPJS Ketenagakerjaan doesn’t only give financial benefits and protection, but members can also get access to some basic welfare needs — like housing, transportation and food.”

“This is the total benefit concept we have introduced to members,” said Elvyn.

BPJS Ketenagakerjaan is supported by nearly 4,000 staffers, 121 full branches and more than 1,100 outlets.

Elvyn has set an ambitious target to open a further 150 branches and about 10,000 new outlets.

“Outlets doesn’t mean [BPJS Ketenagakerjaan] owns it, we could make arrangements with anyone who has the premises to cater to our services. For example, retailers or even banks. So it’s zero investment,” Elvyn said.

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Source: The Jakarta Globe