SSEK Legal Consultants partner Fahrul S. Yusuf and Maria Yudhitama, an associate at the firm, have contributed the Indonesia chapter of the new Practical Law global guide to pension schemes. The following is an excerpt from the Indonesia chapter of the Practical Law global guide to pension schemes.
Regulatory body for supplementary pension schemes
The Financial Services Authority (Otoritas Jasa Keuangan or OJK) is the regulatory body that oversees the operation of pension schemes in Indonesia. The taxation of pensions is regulated and overseen by the Directorate General of Tax, which is part of the Ministry of Finance.
The OJK has the authority to oversee and monitor pension funds. The responsibility includes managing pension funds and implementing pension programs, from a financial and technical viewpoint. Supervision activities conducted by the OJK include:
- Licensing activity.
- Reporting obligations.
- Audits by the OJK.
- Imposition of sanctions.
Other key governance requirements
Pension scheme requirements are usually based on the pension fund rules provided by the founder of the pension fund. The rules must be examined and approved by the OJK before they can take effect.
Penalties for noncompliance
The sanctions provided under Law No. 11 of 1992 regarding Pension Funds and its implementing regulations range from penal sanctions to fines and administrative sanctions.
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