ANNEX II.9 REGULATION OF GOVERNMENT OF THE REPUBLIC OF INDONESIA NUMBER 77 OF 1992 CONCERNING FINANCIAL INSTITUTION PENSION FUND

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1 ANNEX II.9 REGULATION OF GOVERNMENT OF THE REPUBLIC OF INDONESIA NUMBER 77 OF 1992 CONCERNING FINANCIAL INSTITUTION PENSION FUND 1

2 REGULATION OF GOVERNMENT OF THE REPUBLIC OF INDONESIA NUMBER 77 OF 1992 CONCERNING FINANCIAL INSTITUTION PENSION FUND PRESIDENT OF THE REPUBLIC OF INDONESIA Considering: a. that in order to implement Law Number 11 of 1992 on Pension Fund, stipulations that govern establishment of Financial Institution Pension Fund and provision of pension program is needed; b. that for provision of pension program by Financial Institution Pension Fund, stipulation is needed that governs management of aset of Pension Fund, provision of continuous pension benefit, and guarantee of rights of participants incase of among others merger, consolidation and liquidation of Pension Fund; c. that in rotation with this, it is deemed necessary to enact Government Regulation on Financial Institution Pension Fund; In view of : 1. Article 5 Paragraph (2) Of The Constitution 45; To enact : 2. Law Number 11 Of 1992 on Pension Fund (Supplement Number 3477 to State Gazette Number 37 of 1992); 3. DECIDES REGULATION OF GOVERNMENT OF THE REPUBLIC OF INDONESIA ON FINANCIAL INSTITUTION PENSION FUND In this Government Regulation: CHAPTER I GENERAL PROVISION Article 1 1. Pension Fund shall mean Financial Institution Pension Fund as referred to in Law Number 11 of 1992 on Pension Fund; 2. Life Insurer shall mean life insurer as referred to in law Number 2 of 1992 on Insurance Business; 3. bank shall mean commercial bank as referred to in Law Number 7 of 1992 on Banking; 4. a widow/widower shall mean legitimate wife/husband of a participant or retiree that has passed away, who has been registered in Financial Institution Pension Fund before passing away or being retired; 5. Sons/daughters shall mean all legitimate sons/daughters of a participant or retiree, who has been registered in Financial Institution Pension Fund before passing away or being retired; 6. Minister shall mean Minister of Finance of the Republic of Indonesia. CHAPTER II APPROVAL OF PENSION FUND 2

3 Part One Approval Requirements and Procedure Article 2 (1) Establishment of Pension Fund can be done by Bank of Life Insurer. (2) Establishment of Pension Fund shall be approved by the Minister. Article 3 (1) Application for approval of Pension Fund shall be submitted by Bank or Life Insurer using the form determined by the Minister. (2) Application as referred to in paragraph (1) shall be completed with Pension Fund Regulation as well as work program needed to act as Manager. Part Two Pension Fund Regulation Article 4 (1) Pension Fund Regulation shall be determined by Establisher and at least the following stipulations: a. date of establishment of Pension Fund and name of Pension Fund that clearly indicates name of Bank or Life Insurer establishing the Pension Fund; b. formation of asset of Pension Fund that is separated from asset of Bank or Life Insurer establishing the Pension Fund; c. requirements to become participants; d. right of participants to decide retirement age; e. rights and obligations of manager; f. right of participants to determine their choice of available investment types; g. choices of available investment types, procedure of choice and its change; h. determination procedure of asset value of each participant that must be done by Manager; i. right of participants to choose the form of lifetime annuity, and choose life insurer for the purpose of payment of pension benefit, as well as its procedure; j. procedure of withdrawal of a particular amount of fund by participants if possible, lump sum payment of pension benefit as well as transfer of membership to other Financial Institution Pension Fund; k. procedure of appointment and replacement of beneficiaries of pension benefit if relevant participants pass away; l. cost that can be collected from participants, or encumbered to participants account; m. procedure of amendment to Pension Fund Regulation; (2) Asset of Pension Fund as referred to in paragraph (1) letter b shall be collected from: a. Participants contribution; b. Investment return; c. Transfer from other Pension Funds. (3) Choices of investment type as referred to in paragraph (1) letter g shall be determined of Manager and shall meet investment stipulation determined by the Minister. 3

4 Article 5 Pension Fund Regulation as referred to in Article 4 paragraph (1) shall be the basis for the provision of Fixed Contribution Pension Program. Part Three Amendment to Pension Fund Regulation Article 6 (1) Amendment to Pension Fund Regulation shall be made by Establisher. (2) Amendment to Pension Fund Regulation shall be approved by the Minister. Article 7 (1) To obtain approval from the Minister as referred to in Article 6 paragraph (2), Establisher shall submit written application to the Minister containing the explanation of background and objective of amendment to Pension Fund Regulation, as well as completed with: a. new Pension Fund Regulation; b. other documents that can be determined by the Minister. (2) Within maximally 3 (three) months since the receipt of the application fro approval of amendment to Pension Fund Regulation that is already complete and meets the stipulation of Law of Pension Fund and regulations made thereunder, the amendment to Pension Fund Regulation shall be approved by the Minister and shall be recorded in a Ledger provided for that purpose. (3) In case that the application is refused, the Minister shall deliver written notification on the refusal to the relevant establisher containing of reason for the refusal, within the time as referred to in paragraph (2). (4) The amended Pension Fund Regulation shall be effective since the date of its approval by the Minister. (5) Manager shall announce the approval as referred to in paragraph (2) in State Gazette of the Republic of Indonesia. Article 8 Amendment to Pension Fund Regulation that results in increase of cost as referred to in Article 4 paragraph (1) letter l shall have no retroactive effect. CHAPTER III PENSION FUND MANAGEMENT Article 9 Establisher of Pension Fund shall act as manager of Pension Fund and responsible for management and investment of Pension Fund. Article 10 (1) Manager shall manage Pension Fund by giving priority to the interest of participants and the other beneficiaries. (2) Manager shall keep account books, records and documents needed for the purpose of Pension Fund activities. (3) Manager shall act carefully, skillfully, wisely and prudentially in performing responsibility in managing Pension Fund. (4) Manager shall keep confidential personal information related with each participant. 4

5 Article 11 Manager shall submit to the Minister periodic report that consists of: a. Technical report; b. Financial report that has been audited by public accountant, in the form, arrangement, and time determined by the Minister. Article 12 (1) For the interest of participants, Manager shall give information about possible risk of loss to investment type chosen by participants through Pension Fund.] (2) Manager shall give information to participants about: a. balance sheet and calculation of business profit in the form, arrangement, and time determined by the Minister; b. matters that arise related with membership in the form and time determined by the Minister; c. every amendment to Pension Fund Regulation. Article 13 At the latest 30 (thirty) days after the end of calendar year, manager shall submit to participants: a. information on fund position at the end of the relevant calendar year; b. slip of fund withdrawal done by the relevant participants as well as tax that has been collected fro the withdrawal within 1 (one) calendar yea. Article 14 Manager shall be responsible for all losses inflicted to the asset of Pension Fund due to acts of manager that violate or neglect tasks and/or obligations as determined in Pension Fund Regulation and laws and regulations on Pension Fund, and shall return to Pension Fund all enjoyments illegally obtained from the asset of Pension Fund. Article 15 Board of commissioners or its equivalent of Pension Fund establisher shall act as Supervisory Board and responsible to supervise the management and investment of Pension Fund. Article 16 Tasks and authorities of Supervisory Board shall be: a. to conduct supervision over management of Pension Fund by manager; b. to submit written annual report on he result of its supervision; c. to appoint public accountant to audit financial report of Pension Fund. CHAPTER IV PENSION FUND CONTRIBUTION Article 17 The maximum amount of participants contribution shall be determined by the Minister. Article 18 (1) Employer can pay contribution to Pension Fund for and in the name of employees. (2) In the event that Employer pays contribution as referred to in paragraph (1), Employer shall state in writing its obligation to pay the entire contribution in cash. 5

6 (3) Written statement as referred to in paragraph (2) shall contain at least: a. the amount of contribution; b. due time of contribution. (4) Change to written statement as referred to in paragraph (3) that results in decrease in the amount of contribution shall not have retroactive effect. (5) Written statement as referred to in paragraph (3) and change as referred to in paragraph (4), shall be submitted to the Minister and announced to participants. CHAPTER V RIGHTS OF PARTICIPANTS Article 19 (1) In case that a participant passes away, pension benefit shall be paid to his/her widow/widower or son/daughter. (2) Pension benefit for widows/widowers shall be paid for a lifetime. (3) In case there is no legitimate widow/widower, pension benefit shall be paid to son/daughter. (4) Pension benefit to son/daughter shall be paid until the son/daughter reaches that age of minimally 21 (twenty one) years. Article 20 (1) In case there is no legitimate widow/widower, or widow/widower passes away or widow/widower is remarried, pension benefit shall be paid to son/daughter. (2) Payment as referred to in paragraph (1) shall be made in lump sum payment. Article 21 (1) Manager at request of a participant at the time of his/her retirement, shall purchase lifetime annuities from Life Insurer that he/she chooses, provided that: a. annuity that he/she chooses provides pension benefit for widow/widower or son/daughter minimally 60% and maximally 100% of pension benefit received by participant; b. annuity that he/she chooses meets the stipulations in Law of Pension Fund and regulations made thereunder as well as Pension Fund Regulation. (2) Requirement as referred to in paragraph (1) shall not apply in case that purchase of annuities is based on request and choice of widow/widower or son/daughter. Article 22 If payment of pension benefit of a participant is completed, and in fact the amount of the entire pension benefit that has been paid is lower than the amount to he/she is entitled at the time pension benefit payment begins, Life Insurer shall pay the difference to legitimate heir of the participant. CHAPTER VI LIQUIDATION OF PENSION FUND Article 23 In the event that Pension Fund is liquidated, liquidator shall transfer the fund to which participants are entitled to another Pension Fund. CHAPTER VII OTHER PROVISIONS Article 24 6

7 (1) In case 2 (two) or more Banks or Life Insurers operating Pension Fund are merged, Pension Fund operated by the merging Bank or Life Insurer shall merge to Pension Fund of the surviving Bank or Life Insurer. (2) In case of merger of Pension Funds as referred to in paragraph (1), membership, liabilities and assets of the merging Pension Fund shall be transferred to Pension Fund of the surviving Bank or Life Insurer. Article 25 (1) In case of 2 (two) or more Banks or Life Insurers operating Pension Fund are consolidated, Pension Funds of the consolidated Banks or Life Insurers shall be combined into 1 (one) Pension Fund. (2) At the time of establishment of Bank or Life Insurer resulted from the consolidation, a Pension Fund shall also be established that receives and is responsible for transfer of membership, liabilities and assets of the consolidated Pension Funds. (3) Bank or Life Insurer resulted from the consolidation as Establisher of Pension Fund as referred to in paragraph (2) shall apply for approval of Pension Fund Regulation. Article 26 Stipulations of Article 24 paragraph (2) and Article 25 paragraph (2) shall not be prejudice to right of a participant to transfer his/her membership to other Pension Fund. Article 27 Further implementation of stipulations of Article 24 and Article 25 shall be determined by the Minister. CHAPTER VIII CLOSING PREVISION Article 28 This government regulation shall come into effect as of the date of its enactment. For the purpose of public knowledge, the enactment of this Law shall be announced in State gazette of the Republic of Indonesia. Approved in Jakarta on November 30, 1992 PRESIDENT OF THE REPUBLIC OF INDONESIA [signed] SOEHARTO Enacted in Jakarta on November 30, 1992 MINISTER/SECRETARY OF THE STATE OF THE REPUBLIC OF INDONESIA [signed] 7

8 MOERDIONO STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 37 OF 1992 This copy is in accordance with the original SECRETARIAT OF CABINET OF THE REPUBLIC OF INDONESIA Head of Bureau of Law and Legislation [signed] Bambang Kasowo, S.H., LL.M. 8