ANNEX 1.37 LAW OF THE REPUBLIC OF INDONESIA NUMBER 11 OF 1992 CONCERNING PENSION FUND

ANNEX 1.37 LAW OF THE REPUBLIC OF INDONESIA NUMBER 11 OF 1992 CONCERNING PENSION FUND 1

LAW OF THE REPUBLIC OF INDONESIA NUMBER 11 OF 1992 CONCERNING PENSION FUND WITH THE BLESSING OF THE ALMIGHTY GOD PRESIDENT OF THE REPUBLIC OF INDONESIA Considering: a. that national development is implemented in order to develop Indonesian humans that are whole and develop all Indonesian people based on Pancasila and the Constitution 45; b. that in addition to the essence of national development, it is necessary to have make a fund raising and management in order to maintain continuity of income in the old age in order to realize social justice to all Indonesian people; c. that Pension Fund is a facility to raise fund in order to improve welfare of its participants as well as to improve the participation of the public in maintaining increasing and continuous national development; d. that Pension Fund can also improve work motivation and peacefulness to improve productivity; e. that to give optimal efficiency and effectivity in the operation of Pension Fund in accordance with its function, it is deemed necessary to regulate the operation in a law; In view of : 1. Article 5, Article 20, Article 27 Paragraph (2) And Article 33 Of The Constitution 45; To enact : 2. Law Number 7 Of 1983 On Income Tax (Supplement Number 3263 to State Gazette Number 50 of 183) as has been amended with Law Number 7 of 1991 on Amendment to Law Number 7 Of 1983 On Income Tax (Supplement Number 3459 to State Gazette Number 93 of 1991); With approval of THE HOUSE OF REPRESENTATIVES OF THE REPUBLIC OF INDONESIA LAW ON PENSION FUND DECIDES In this Law: CHAPTER I GENERAL PROVISION Article 1 1. Pension Fund shall mean a legal entity that manages a program that promises pension benefit; 2. Employer Pension Fund shall mean a Pension Fund that is established by an individual or an entity that employs employees, as establisher, to operate Fixed Benefit Pension Fund or Fixed Contribution Pension Fund, for the interest of some or all of its employees as participants, and that results in an obligation to Employer; 2

3. Profit-Based Pension Fund shall mean an Employer Pension Fund that operates Fixed Contribution Pension Fund, with contribution only from employer that is based on a formula that is related to employer s profit; 4. Financial Institution Pension Fund shall mean a Pension Fund that is established by a bank or a life insurer to operate Fixed Contribution Pension Fund for individuals, either employees or independent workers separated from Employer Pension Fund for employees of the relevant bank or life insurer; 5. Pension Fund Regulation shall mean the regulation that contains stipulations under which a pension program is operated; 6. Pension Program shall mean every program that strive for pension benefit for participants; 7. Fixed Benefit Pension Program shall mean a pension program whose benefit is determined in Pension Fund Regulation or other pension programs that are not Fixed Contribution Pension Program; 8. Fixed Contribution Pension Program shall mean a pension program whose contribution is determined in Pension Fund Regulation and all contributions as well as the proceeds of its development are recorded in the account of each participant as pension benefit; 9. Pension Benefit shall mean periodic payment made to participants at the time and with the method determined in Pension Fund Regulation; 10. Normal Pension Benefit shall mean pension benefit for participants that begins to be paid at the time the participants have reached normal retirement age or thereafter; 11. Accelerated Pension Benefit shall mean pension benefit for participants that is paid to participants when they have not reached retirement age; 12. Disability Pension Benefit shall mean pension benefit for participants that is paid if participants become disabled; 13. Delayed Pension shall mean the right to pension benefit for participants who quit working before reaching normal retirement age, the payment of which is delayed until the time the participants are retired in accordance with Pension Fund Regulation; 14. A Participant shall mean any person that meets requirements of Pension Fund Regulation; 15. An Employer shall mean an establisher or establisher partner that employs employees; 16. An Establisher shall mean: a. a person or entity that establishes an Employer Pension Fund; b. a bank or life insurer that establishes Financial Institution Pension Fund; 17. An Establisher Partner shall mean an employer that participates in an Employer Pension Fund of an Establisher, for the interest of some or all of its employees; 18. Manager shall mean Pension Fund Manager; 19. Supervisory Board shall mean supervisory board of the Pension Fund; 20. An Individual Worker shall mean a self-employed worker, not employee of an individual or an entity; 21. Custodian shall mean a bank that operates custodian service as referred to in Law on Banking; 22. Ledger shall mean a book that contains the list of approvals of Pension Fund Regulation and amendments thereto and can be looked up by the public at any time; 23. Disability shall mean total and permanent disability that cause a person not to be able to do a work that gives him or her proper income in accordance with his or her education, expertise, skill, and experience; 3

24. Minister shall mean Minister of Finance of the Republic of Indonesia; Types of Pension Fund shall be: 1. Employer Pension Fund; 2. Financial Institution Pension Fund. CHAPTER II TYPE AND LEGAL STATUS OF PENSION FUND Article 2 Article 3 Pension Fund shall have a status as a legal entity with conditions and procedures stipulated herein. Article 4 Any party that with or without contribution, manages and runs a program that promises an amount of money whose payment is related with the reaching of a particular age, shall be obliged to first obtain approval from the Minister based on this Law, except if such a program is based on a separate law. CHAPTER III EMPLOYER PENSION FUND Part One Establishment and Approval Procedure Article 5 (1) Establishment of Employer Pension Fund shall be based on: a. written statement of establisher stating its decision to establish a Pension Fund and enforce a Pension Fund Regulation; b. a Pension Fund Regulation determined by such establisher; c. appointment of manager, supervisory board and custodian. (2) In the event that the Pension Fund is established to run a pension program for employees of more than one employer, the establishment shall be based on: a. written statement of establisher stating its decision to establish a Pension Fund, enforce a Pension Fund Regulation, and confirm its approval to participation of employees of establisher partner; b. written statement of establisher partner stating its willingness to be subject to Pension Fund Regulation determined by establisher for the interest of employees of establisher partner that meet requirements to become participants, as well as granting of full authority to establisher to implement Pension Fund Regulation; c. Pension Fund Regulation determined by establisher; d. appointment of manager, supervisory board and custodian. (3) Stipulations on the matters that shall be contained in Pension Fund Regulation as referred to in paragraphs (1) and (2) as well as procedure of its amendment shall be further provided with Government Regulation. Article 6 (1) Establisher shall apply for approval of Pension Fund to the Minister by attaching: a. Pension Fund Regulation; b. written statement of establisher and establisher partner, if any; 4

c. decision of establisher on appointment of manager, supervisor board, and custodian; d. investment instruction; e. actuarial report, if the Pension Fund runs Fixed Benefit Pension Program; f. agreement made between manager and custodian. (2) Within minimally 3 (three0 months since the receipt of application for approval of the Pension Fund completely and in accordance with stipulations hereof and regulation made hereunder, Pension Fund Regulation shall be approved with decision of the Minister and recorded in the ledger provided for that purpose, and in the event that the application is refused, notification of the refusal shall be given along with the reason for refusal. (3) Stipulation about application as referred to in paragraph (1) shall be further provided with Government Regulation. Article 7 (1) Pension Fund shall have a status as a legal entity and can begin its activity as a Pension Fund since the date of approval from the Minister. (2) Manager shall announce the establishment of Pension Fund by entering the Minister s decision on approval of Pension Fund Regulation to State Gazette of the Republic of Indonesia. Article 8 (1) An employer that has not established a Pension Fund for all its employees can be a partner of an establisher of Pension Fund that has been established by meeting conditions as referred to in Article 5 paragraph (2). (2) Pension Fund that has been established can merge with another Pension Fund, or separate into two or more Pension Funds. (3) Stipulation on merger and separation of Pension Funds as referred to in paragraph (2) shall be further provided with Government Regulation. Article 9 Amendment to Pension Fund Regulation may not reduce pension benefit that becomes the right of participants received during their membership until the time of the Minister s approval. Part Two Pension Fund Management Article 10 (1) Manager shall be appointed by and responsible to establisher. (2) The Minister shall determine stipulations and requirements for a person or legal entity that can be appointed as manager. (3) Manager shall be responsible for the implementation of Pension Fund Regulation, management of Pension Fund as well as taking legal action for and in the name of Pension Fund, and representing Pension Fund in and outside of the court. (4) Tasks, obligations and responsibilities of manager as well as procedure of appointment and change of manager shall be further provided with Government Regulation. Article 11 To take any necessary action in order to implement Pension Fund Regulation, Pension Fund management, investment management and to guarantee security of Pension Fund aset, manager can make an agreement with a third party. 5

Article 12 (1) Supervisory board consists of representatives of employer and participants in the same number. (2) Members of supervisory board are appointed by establisher (3) Members of supervisory board cannot concurrently hold a position of manager. Article 13 (1) Tasks and authority of supervisory board shall be: a. to supervise the management of Pension Fund by manager; b. to submit written annual report on its supervision to establisher, and announce the copy of the report in order for participants to know it. (2) Tasks, obligations and responsibilities of supervisory board, as well as procedure of appointment of and change of supervisory board shall be further provided with Government Regulation. Article 14 Financial report of Pension Fund shall be audited annually by public accountant appointed by supervisory board. Part Three Pension Fund Contribution Article 15 (1) Contribution of Employer Pension Fund shall be in the form of: a. contribution of employer and participants; or b. employer s contribution. (2) All contributions of employer and participants as well as any investment return obtained shall be deposited to Pension Fund. Article 16 (1) Employer s contribution shall be paid with installment at least once in a month except for contribution of a Profit-Based Pension Fund, which shall be deposited at the latest 120 (one hundred and twenty) days since the end of employer s fiscal year. (2) If, based on actuarial report submitted to the Minister, Pension Fund actually has assets exceeding its liabilities, the surplus exceeding a particular limit determined by the Minister shall be used as employer s contribution.] (3) In the event that establisher of Pension Fund fails to fulfill the obligation as referred to in paragraph (1) for a period of 3 (three) consecutive months, the manager shall notify the Minister thereof. (4) In case that establisher partner fails to fulfill the obligation as referred to in paragraph (1) for a period of 3 (three) consecutive months, or in case that establisher partner is dissolved, the manager shall notify the establisher thereof, and the establisher shall then make an amendment to Pension Fund Regulation by: a. determining deferral of membership of employees of establisher partner; or b. ending membership of employees of establisher partner after separation of asset of Pension Fund of employees of establisher partner from that of other participants based on stipulation as referred to in Article 8 paragraph (2). Article 17 6

(1) In the event of Pension Fund Regulation stipulates that there must be participants contribution, the employer shall act as collector of participants contribution, which si collected every month. (2) Employer shall deposit all contributions of participants that it collects as well as its own contribution to Pension Fund at the latest on the 15 th day of the following month. (3) Participants contribution and employer s contribution that have not been deposited yet after two and a half months after their due date shall be stated: a. as employer s debt that can be soon collected, and imposed with proper interest that is collected since the first day of the month as referred to in paragraph (2). b. as receivables of Pension Fund that has the main right I implementation of court s decision execution, if employer is liquidated. (4) Stipulations as referred to in paragraphs (1), (2) and (3) shall be further provided with Government Regulation. Article 18 (1) The amount of participants contribution of Pension Fund that provides a Fixed Benefit Pension Program may not exceed that amount determined by the Minister. (2) The amount of pension benefit determined in Pension Fund Regulation, as well as contribution and asset necessary for financing of pension program may not exceed that amount determined by the Minister. (3) Regulation of employer s contribution in Profit-Based Pension Fund shall be determined by the Minister. Part Four Right of Participants Article 19 Every employee that meets requirements of membership in Pension Fund established by employer shall have the right to become a participant if he or she has reached the age of minimally 18 (eighteen) years or is already married, and has worked for the employer of employer partner for at least 1 (one) year. Article 20 (1) The right to every pension benefit paid by Pension Fund cannot be used as loan security, and cannot be transferred or confiscated. (2) All transactions that result in handover, burdening, binding, payment of pension benefit before due date or putting as security pension benefit that is received from Pension Fund shall be stated to be cancelled hereunder. (3) A payment of pension benefit made by manager with good intention shall release Pension Fund from its responsibility. Article 21 (1) A participant that meets the requirements shall have the right to Normal Pension Benefit, or Disability Pension Benefit, or Accelerated Pension Benefit, or Delayed Pension, the amount of which is calculated based on the formula determined in Pension Fund Regulation. (2) Pension Fund Regulation shall contain stipulation about the amount of pension benefit for widows/widower or immature sons/daughter of participants. (3) In Pension Fund that provides Fixed Contribution Pension Program, Pension Fund Regulation shall stipulate the right of participants to decide their choice of annuity form. 7

Article 22 (1) In the event that Pension Fund provides Fixed Benefit Pension Program, the amount of pension benefit as referred to in Article 21 paragraph (2) shall meet the following stipulations: a. in case a retiree passes away, pension benefit paid to his/her legitimate widow/widower shall be at least 60% (sixty percents) of pension benefit that has been paid to the retiree; b. in case that a participant passes away within 10 (ten) years before he/she reaches normal retirement age, pension benefit paid to his/her legitimate widow/widower shall be at least 60% (sixty percents) of pension benefit that should be paid to the participant if the participant is retired shortly before passing away; c. in case that a participant passes away more than 10 (ten) years before he/she reaches normal retirement age, pension benefit paid to his/her legitimate widow/widower shall be at least 60% (sixty percents) of pension benefit that should become his/her right if he/she quits working. (2) In the event that there is no legitimate widow/widower or the legitimate widow/widower has passed away, pension benefit as referred to in paragraph (1) shall be paid to immature son/daughter of the participant. (3) Payment of pension benefit as referred to in paragraph (1) letter c can be made in lump sum payment. Article 23 (1) If Pension Fund provides Fixed Contribution Pension Program, the amount of pension benefit as referred to in Article 21 paragraph (2) shall meet the following stipulations: a. if a retiree passes away, pension benefit paid to his/her legitimate widow/widower shall not be less than the amount to which he/she is entitled based on choice of the form of annuity as referred to in Article 21 paragraph (3); b. if a participant passes away before the commencement of pension payment, pension benefit paid to his/her legitimate widow/widower shall be 100% (one hundred percent) of the amount that should be his/her right if he/she quits working. (2) In the event that there is no legitimate widow/widower or the legitimate widow/widower has passed away, pension benefit as referred to in paragraph (1) shall be paid to immature son/daughter of the participant. (3) In case that a participant passes away more than 10 (ten) years before he/she reaches normal retirement age, pension benefit as referred to in paragraph (1) letter b can be made in lump sum payment. (4) In case that a participant does not decides his/her choice of form of annuity as referred to in Article 21 paragraph (3), he/she shall be considered to choose the form of annuity that gives payment to his/her widow/widower in the amount equal to that of payment made to him/her. Article 24 (1) A participant that quits working and has membership term of less than 3 (three) tears, shall have the right to at least the accumulated amount of his/her own contribution, plus proper interest thereon. (2) A participant that joins Fixed Benefit Pension Program, if quitting working after having membership term of at least 3 (three) years and not having reached accelerated retirement age, shall have the right to receive Delayed Pension the amount of which is equal to the amount calculated based on pension formula for his/her membership until the time of his/her quitting work. (3) A participant of Pension Fund that provides Fixed Contribution Pension Program, if quitting work after having membership term of at least 3 (three) years and not having reached 8

accelerated retirement age, shall have the right to his/her own contribution and employer s contribution along with proceeds of its development that must be used to obtain delayed pension. Article 25 (1) Pension benefit from a Pension Fund cannot be paid to a participant before he/she reaches accelerated retirement age, except for payment of pension of widow/widower as referred to in Article 22 paragraph (3) and Article 23 paragraph (3) and for returning of contribution as referred to in Article 24 paragraph (1). (2) Pension Benefit for a participant or his/her widow/widower shall be in the form of fixed installment, or increase in order to balance price rise, the payment of which is made once a month for a lifetime. (3) In case that the amount of monthly pension benefit is smaller than a particular amount determined from time to time by the Minister, the same value can be paid in lump sum payment. (4) Without prejudice to stipulation as referred to in paragraph (1) and paragraph (2), Pension Fund Regulation can make possible a choice for a participant at the time of retirement or at the time of dismissal and for his/her widow/widower or son/daughter at the time he/she passes away to receive up to maximally 20% (twenty percent) of pension benefit in lump sum payment. Article 26 (1) A participant cannot resign or demand from his/her right to Pension Fund if he/she still meets membership requirements. (2) In the event that a participant quits working more than 10 (ten) years before he/she reaches normal retirement age, based on his/her choice, delayed pension can still be paid to him/her by the relevant Pension Fund, or can be transferred to other Employer Pension Funds, provided that he/she is still alive within 30 (thirty) days after he/she quits working. Article 27 (1) A participant who is retired at normal retirement age or thereafter shall have the right to pension benefit that is calculated based on pension formula applicable for his/her membership until his/her retirement. (2) Normal retirement age shall be determined in Pension Fund Regulation and may not exceed the age determined by the Minister dealing with manpower. (3) A participant who is retired before reaching normal retirement age shall have the right to apply for payment of accelerated Pension Benefit provided that: a. he/she is at the age of at least 10 (ten) years before normal retirement age; or b. he/she is in disabled condition as referred to in this Law. (4) The value of Accelerated Pension Benefit shall at least be equal to current value of Delayed pension. (5) Pension Fund Regulation can determine maximum age limit of retired participant in case that he/she keeps working after reaching normal retirement age, provided that such maximum age limit is in accordance with the age determined by the Minister dealing with manpower. Article 28 Stipulations as referred to in Article 21, Article 22, Article 23, Article 24, Article 25, Article 26 and Article 27 paragraph (1) and paragraph (4) shall be further provided with Government Regulation. Part Five 9

Asset of Pension Fund shall be gathered from: a. employer's contribution; b. participants contribution; c. investment return; d. transfer from other Pension Funds. Pension Fund Asset and Its Management Article 29 Article 30 (1) Management of asset of Pension Fund shall be done by manager in accordance with: a. investment instruction determined by establisher; and b. stipulation about investment determined by the Minister. (2) In the event that Pension Fund provides Fixed Contribution Pension Program, investment instruction shall be determined by establisher together with supervisory board. (3) Investment instruction as referred to in paragraph (1) and paragraph (2) can be changed, and such change shall be reported to the Minister at the latest 30 (thirty) days since such change is determined. (4) With approval from establisher and supervisory board, management of asset of Pension Fund can be transferred by manager to a financial institution that meets conditions determined by the Minister. (5) Asset of Pension Fund stored in custodian can only be withdrawn or transferred with instruction of manager. (6) Responsibility for payment of pension benefit to participants or beneficiaries of pension benefit can be transferred by manager by purchasing lifetime annuities from life insurer, which then is responsible to make such payment. (7) Manager of Pension Fund that provides Fixed Contribution Pension Program shall transfer responsibility as referred to in paragraph (6) to life insurer chosen by participants or beneficiaries of pension benefit. Article 31 (1) Pension Fund shall not be allowed to make any payment, except payment determined in Pension Fund Regulation. (2) Pension Fund shall not be allowed to borrow or use its asset as collateral against loan. (3) No portion of asset of Pension Fund can be lent or invested, either directly or indirectly, in securities issued by, or in land and building owned or used by the followings: a. manager, establisher, establisher partner or custodian; b. a business entity whose more than 25% (twenty five percent) of shares is owned by individual or entity that consists of establisher, establisher partner, manager, custodian, or worker union whose members are participants of the relevant Pension Fund; c. An official or director of entity as referred to in letters a and b, as well as their respective families until the second degree according to linear or diagonal relation, including sons/daughters in law and brothers/sisters in law. Article 32 (1) Without prejudice to stipulation as referred to in Article 31 paragraph (3), lease of land, building or other fixed assets of Pension Fund to the parties as referred to in Article 31 10

paragraph (3) can only be done as long as it is done through transaction that is based on the applicable market price. (2) Stipulation as referred to in Article 31 paragraph (3) shall not apply to investment of Pension Fund in the form of securities that are marketed in Capital Market in Indonesia, by meeting stipulation about investment determined by the Minister. (3) Stipulation as referred to in Article 31 paragraph (3) shall also applies to Asset of Employer Pension Fund that is managed by a financial institution as referred to in Article 30 paragraph (4). (4) Without prejudice to stipulation as referred to in Article 31 paragraph (3), a Profit-Based Pension Fund can invest at least 50% (fifty percent) of its asset in the form of ordinary share in the company of establisher or establisher partner. Part Six Liquidation and Settlement of Pension Fund Article 33 (1) Liquidation of a Pension Fund can be done based on request of establisher to the Minister. (2) A Pension Fund can be liquidated if the Minister is of opinion that the Pension Fund cannot fulfill its obligation to participants, retirees and beneficiaries, or, in case of stoppage of contribution, it can put its financial condition at risk. (3) If establisher of a Pension Fund is liquidated, the Pension Fund shall be liquidated. Article 34 (1) Liquidation of a Pension Fund shall be determined wit Decision of the Minister, which also appoints the liquidator to take any necessary action within a period of time determined by the Minister. (2) Manager of Pension Fund can be appointed as liquidator. (3) Cost arising in relation with liquidation of Pension Fund shall be borne by Pension Fund. Article 35 (1) Liquidator shall have the following tasks and authorities: a. to take all legal actions for and in the name of Pension Fund as well as represent Pension Fund in and outside the court; b. to record all assets and liabilities of Pension Fund; c. to determine and notify all participants, retirees and beneficiaries of the amount of pension benefit that can be received from Pension Fund. (2) Liquidator shall submit work plan and propose procedure of liquidation settlement to the Minister and implement settlement process after obtaining the approval of the Minister. Article 36 (1) Before liquidation process is finished, employer shall remain responsible for due contribution until the time Pension Fund is liquidated in accordance with stipulation about financing and solvability of determined by the Minister. (2) Returning of asset of Pension Fund to establisher shall be prohibited. (3) Any asset surplus after settlement of liabilities at the time of liquidation shall be used to increase pension benefit for participants until maximum limit determined by the Minister as referred to in Article 18 paragraph (2). 11

(4) In case there is still fund surplus after the increase of pension benefit until maximum limit as referred to in paragraph (3), the remaining surplus shall be distributed to participants, retirees and beneficiaries. Article 37 (1) In distribution of asset of Pension Fund that is liquidated, the right of participants and retirees as well as their heirs shall be the main right. (2) Further stipulation about distribution of asset as referred to in paragraph (1) shall be provided with Government Regulation. Article 38 Liquidator shall report the implementation and settlement of liquidation to the Minister within a period of time as referred to in Article 34 paragraph (1). Article 39 (1) Liquidator shall announce the result of liquidation settlement that has been approved by the Minister in State Gazette of the Republic of Indonesia. (2) Legal entity status of Pension Fund shall end since the date of announcement as referred to in paragraph (1). CHAPTER IV FINANCIAL INSTITUTION PENSION FUND Article 40 (1) Financial Institution Pension Fund can only provide Fixed Contribution Pension Program. (2) A bank and a life insurer can act as establisher of Financial Institution Pension Fund by fulfilling stipulation provided with Government Regulation. (3) To establish Financial Institution Pension Fund, a bank or a life insurer as referred to in paragraph (2) shall apply for approval to the Minister, by attaching Pension Fund Regulation. Article 41 (1) Stipulations on the matters that shall be contained in Pension Fund Regulation as referred to in Article 40 paragraphs (3) shall be further provided with Government Regulation. (2) Every amendment to Pension Fund Regulation shall be approved by the Minister. Article 42 (1) Membership in Financial Institution Pension Fund shall be open to individuals either employees or independent workers. (2) A participant shall have the right to his/her contribution, including employer s contribution on behalf of participant, if any, plus the proceeds of its development, counted as of the date of his/her membership that is recorded in his/her name in Financial Institution Pension Fund. (3) In case a participant passes away, his/her right shall passes to his/her heir. Article 43 Establisher of Financial Institution Pension Fund shall act as manager of Financial Institution Pension Fund and responsible for management of investment of Financial Institution Pension Fund by meeting stipulation about investment determined by the Minister. Article 44 (1) In case that a bank of life insurer establishing Financial Institution Pension Fund is liquidated, the relevant Financial Institution Pension Fund shall be liquidated, and the Minister shall appoint a liquidator to make the liquidation settlement. 12

(2) Liquidator of bank or life insurer establishing Financial Institution Pension Fund that is liquidated can be appointed as liquidator of the relevant Financial Institution Pension Fund. Article 45 Asset of Financial Institution Pension Fund shall be excluded from any legal charge against the asset of the bank or life insurer establishing the relevant Financial Institution Pension Fund. Article 46 Stipulations as referred to in Chapter III hereof shall also apply to Financial Institution Pension Fund, except for Article 5, Article 6 paragraph (1), Article 8 paragraph (1), Article 10 paragraph (1), Article 12 paragraph (1), Article 15, Article 16, Article 17, Article 18 paragraph (1) and paragraph (3), Article 19, Article 22, Article 24, Article 27 paragraph (2), Article 29, Article 30 paragraph (1) letter a, paragraph (2), paragraph (3), paragraph (4) and paragraph (5), Article 32 paragraph (3) and paragraph (4), as well as Article 36 paragraph (1) and paragraph (2). Article 47 (1) Without prejudice to stipulation as referred to in Article 25 paragraph (1) and paragraph (2) and Article 26, Financial Institution Pension Fund can make possible withdrawal of a particular amount by a participant at anytime provided that the amount of fund withdrawn does not exceed the amount of his/her contribution before the withdrawal. (2) The amount of fund withdrawn as referred to in paragraph (1) shall not include the proceeds of its development and fund transferred from other Pension Funds. Article 48 Further stipulation about Financial Institution Pension Fund shall be provided with Government Regulation. CHAPTER V GRANTING OF TAX FACILITY Article 49 (1) Employer Pension Fund and Financial Institution Pension Fund established hereunder shall be subject of tax as referred to in Law Number 7 of 1983 on Income Tax. (2) Contribution received by Employer Pension Fund and Financial Institution Pension Fund hereunder as well as income of Pension Fund from capital invested in particular sectors based on Decree of Minister of Finance as referred to in law Number 7 of 1983 on Income Tax shall not be subject of tax and shall continue until liquidation process is completed incase Pension Fund is liquidated. CHAPTER VI DEVELOPMENT AND SUPERVISION Article 50 (1) Development and supervision of Employer Pension Fund and Financial Institution Pension Fund shall be done by the Minister. (2) Development and supervision as referred to in paragraph (1) shall include management of asset of Pension Fund and provision of pension program, both in financial and operational field. (3) Stipulation of implementation of development and supervision as referred to in paragraph (1) and paragraph (2) shall be determined by the Minister. Article 51 13

(1) Pension Fund shall be managed by paying attention to the interest of participants as well as beneficiaries of pension benefit as provided in Pension Fund Regulation. (2) Pension Fund shall be implemented in accordance with Pension Fund Regulation and shall meet stipulations hereof and regulations made hereunder. Article 52 (1) Every Pension Fund shall submit to the Minister periodic report on its activity, consisting of: a. financial report that has been audited by public accountant; b. technical report prepared by manager or by manager and actuary in accordance with stipulation determined by the Minister. (2) In conducting the development and supervision as referred to in Article 50, the Minister shall conduct direct examination of Pension Fund. (3) Every establisher, establisher partner, and custodian shall present books, records, documents as well as give information necessary for the purpose of examination as referred to in paragraph (2). (4) For the purpose of direct examination as referred to in paragraph (2), the Minister can appoint a public accountant and/or an actuary. Article 53 (1) Pension Fund that provides Fixed Contribution Pension Program shall have actuarial report that must be submitted to the Minister at least once in 3 (three) years or if amendment is made to Pension Fund Regulation. (2) Actuarial report as referred to in paragraph (1) and Article 6 paragraph (1) letter e shall state: a. the amount of contribution needed to finance pension program; b. whether the asset possessed by Pension Fund is sufficient for payment of pension benefit; and c. the amount of contribution installment to cover financial deficit, which needs to be paid within a period of time allowed in stipulation about financing and solvability determined by the Minister. Article 54 (1) Every Pension Fund shall announce its balance sheet and calculation of business profit to participants according to the form, arrangement and time determined by the Minister. (2) Manager shall give information to participants on the matters arising in relation with their membership in the form and time determined by the Minister. (3) Manager shall give information to participants on every change made to Pension Fund Regulation. (4) Manager shall give personal information related with each participant. Article 55 (1) The Minister can impose administrative sanction to Pension Fund or establisher for violation to stipulations as referred to in Article 17 paragraph (2) and paragraph (3), Article 31 paragraph (1), Article 51, Article 52 paragraph (1) and paragraph (3), and Article 54 as well as regulations made thereunder. (2) Stipulation about administrative sanction as referred to in paragraph (1) shall be further provided by the Minister. CHAPTER VII 14

CRIMINAL STIPULATION Article 56 (1) Anyone who intentionally, with or without contribution, manages and runs a program that promises an amount of money the payment of which is related with reaching of a particular age, or does a Pension Fund activity, without approval from the Minister as referred to in Article 4, Article 6, and Article 40 shall be punished with maximally 5 (five) year imprisonment and fine as much as maximally Rp 5,000,000,000.00 (five billion rupiah). (2) Stipulation as referred to in paragraph (1) shall not apply to operation of Pension Fund and Old Age Savings of Civil Servants, and Members of Armed Forces of the Republic of Indonesia that is managed by a State-Owned Enterprise based on the applicable laws and regulations. Article 57 Anyone who intentionally violates stipulation of Article 31 paragraph (2) and paragraph (3) shall be punished with maximally 5 (five) year imprisonment and fine as much as maximally Rp 5,000,000,000.00 (five billion rupiah). Article 58 Anyone who intentionally causes payment of an amount of money of Pension Fund that deviates from Pension Fund Regulation and participates in transactions that involve assets of Pension Fund and contradict the stipulations hereof or those of regulations made hereunder shall be punished with maximally 5 (five) year imprisonment and fine as much as maximally Rp 5,000,000,000.00 (five billion rupiah). Anyone who intentionally: Article 59 a. makes or causes to make a false report in books or in report, or in document or business activity report, or report of Pension Fund transactions; b. omits or does not include or causes to omit a report in books or in report or in document or business activity report, or report of Pension Fund transactions; c. changes, makes unclear, hides, deletes or omits a record in books or in report or in document or business activity report, or transaction report or damages bookkeeping record of Pension Fund shall be punished with maximally 6 (six) year imprisonment and fine as much as maximally Rp 6,000,000,000.00 (six billion rupiah) Article 60 Criminal actions as referred to in Article 56, Article 57, Article 58 and Article 59 shall be a crime. CHAPTER VIII TRANSITIONAL PROVISION Article 61 (1) At the time this Law comes into effect, the approval of all Pension Funds that have been approved by the Minister as referred to in Article 4 paragraph (3) letter h of Law Number 7 of 1983 on Income Tax shall be stated based on this Law. (2) Pension Funds as referred to in paragraph (1) shall adjust themselves to stipulations hereof at the latest and within 1 (one) year since this Law comes into effect. (3) Without prejudice to stipulation as referred to in paragraph (2), investment made by a Pension Fund that has already been established before the enactment hereof shall be adjusted in accordance with stipulation as referred to in this Law within 5 (five) years since the enactment hereof. 15

(4) Without prejudice to stipulation as referred to in paragraph (2), pension funds as referred to in paragraph (1) that provide pension program that promises lump sum payment of money, can continue the program until the completion of all obligations to employees that have become participants at the time this Law begins to come into effect. (5) Any individual or legal entity that operates a Pension Fund by any name either, with or without contribution, that has not been approved by the Minister shall apply for approval to the Minister based on this Law, at the latest within 1 (one) year since this Law begins to come into effect. (6) The Minister can allow payment in installment of deficit of required asset due to tenure before the enactment of this Law, within a period of time longer than that determined in stipulation about financing and solvability. (7) Existing Pension Funds of employees in any form can only name themselves as Pension Funds if operated based on this Law. (8) Stipulation as referred to in paragraph (7) shall not apply to operation of Pension Funds and Old Age Savings of Civil Servants, and Members of Armed Forces of the Republic of Indonesia that is managed by a State-Owned Enterprise. CHAPTER IX CLOSING PROVISION Article 62 With the enforcement of this Law, Arbeidersfonden Ordonnatie (Staatsblad of 1926 Number 377) shall be stated to be no longer used as the basis for Pension Fund establishment. Article 63 This Law shall come into effect since 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 April 20, 1992 PRESIDENT OF THE REPUBLIC OF INDONESIA [signed] SOEHARTO Enacted in Jakarta on April 20, 1992 MINISTER/SECRETARY OF THE STATE OF THE REPUBLIC OF INDONESIA [signed] MOERDIONO STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 37 OF 1992 This copy is in accordance with the original 16

SECRETARIAT OF CABINET OF THE REPUBLIC OF INDONESIA Head of Bureau of Law and Legislation [signed] Bambang Kasowo, S.H., LL.M. 17

EXPLANATORY NOTE ON LAW OF THE REPUBLIC OF INDONESIA NUMBER 11 OF 1992 CONCERNING PENSION FUND GENERAL In order to implement national development, which is principally the development of Indonesian humans that are whole and development of all Indonesian people based on Pancasila and the Constitution 45, the attempt to realize proper life for all Indonesian people is a constitutional obligation that must be fulfilled strategically, gradually and continuously. In line with the effort to maintain continuity of income in old age, attention and more effective and efficient handling need to be given. In this relation, in the public a form of savings has been developed which is widely known by employees, namely Pension Fund. The form of this savings has the characteristic as a long-term savings, to be enjoyed after employees are retired. The provision of this savings is done in a program, namely pension program, which seeks to give pension benefit to its participants through an accumulation system which is usually known as financing system. Financing system of a pension program makes possible an accumulation of fund that is needed to maintain continuity of income of the program participants at old age. Assurance in continuity of income results in peacefulness in working, and thus improves employees motivation, which in turn creates conducive climate for productivity improvement. In a broader dimension, the accumulated fund collected from the provision of pension program is one of the sources of fund that is needed to maintain and improve national development that is based on own ability. This is in line with one of the objectives of long-term development, namely to optimally improve and develop domestic sources of development fund, both from the government and from the public. Considering its great benefit, for participants, the public and national development, the effort to provide pension program all this time has been supported by the government. The support is stated in laws ad regulations in the field of tax, namely by granting of (income) tax postponement facility as provided in Article 4 paragraph (3) letter h of Law Number 7 of 1983 on Income Tax. Recently, pension programs with fund accumulation are provided by employers based on Arbeidersfonden Ordonnatie (Staatsblad of 1926 Number 377), which is regulation made under Article 1601 part two of Civil Code. This stipulation makes possible establishment of joint fund of employers and employees, but not sufficient as legal basis for provision of pension program. This is because there is no stipulation about basic matters fro the purpose of fulfillment of right and obligation of the parties in the provision of pension program, as well as about its management, administration, supervision, etc. In addition, institution of a foundation which in the practice is used as the medium to provide pension program also has weaknesses. On the other hand, many people have the status as independent workers, who are not employees of an individual or entity. These people also need to be given the same opportunity to prepare themselves to face their retirement period, as well as the opportunity to use income tax postponement facility. Accordingly, the presence of a law on Pension Fund is greatly needed. Law on Pension Fund is expected to bring about rapid growth of Pension Funds in Indonesia that are more orderly and healthy. Law on Pension Fund, which is the legal foundation for establishment of Pension Fund and provision of pension program, has the following main principles: 18

1. Principle of separation of asset of Pension Fund from asset of legal entity that establishes it. This principle is supported with the presence of a separate legal entity for the Pension Fund, which is managed based on stipulation of Law. Based on this principle, the asset of Pension Fund which mainly comes from contribution is protected from undesired things that might happen to its establisher. 2. Principle of provision in financing system. With this principle, provision of pension program, either for employees or for independent workers, must be done with accumulation of fund that is managed separately from the asset of the establisher, so that it is enough to make payment to which participants are entitled. Accordingly, based on this Law, formation of reserve in company in order to finance the payment of pension benefit to employees is not allowed. 3. Principle of development and supervision. In accordance with its objective, the use of Pension Fund must be avoided for the interest that can result in non-achievement of the main objective, namely to fulfill payment of an amount to which participants are entitled. In its explanation, development and supervision of investment of Pension Fund asset. 4. Principle of benefit postponement. Accumulation of fund in the provision of pension program is intended to fulfill the payment to which retired participants are entitled so that the continuation of their income can be maintained. In line wit that, the principle of bunyi postponement is applied, which stipulates that the payment can be made only after the participant is retired and the payment is made periodically. 5. Principle of freedom to establish or not to establish Pension Fund. Based on this principle, the decision to establish a Pension Fund is the initiative of an employer to promise pension benefit for its employees, which results in financing consequence. Accordingly, the initiative must be based on financial capability of the employer. The main thing that must always be considered is that the decision to promise pension benefit is a commitment that brings about financing consequence, even until the time the Pension Fund has to be liquidated. Through the abovementioned principles, attempt is made to provide an institutional procedure that enables every member of society, both collectively and individually, to plan and prepare themselves to face their old age or for their family in case of death or accidents causing disability, by establishing or participating in a Pension Fund. Principally, activity of a company is a joint attempt of employer and employees to improve the development of the company and welfare of the employees and general public. This is in line with the obligation of the company to care about the improvement of the employees welfare in accordance with improvement of ability for the progress of the company. Therefore, although this Law applies the principle of freedom to establish or not to establish Pension Fund, in order to improve employees productivity, which in turn improves their welfare, general public, and also improve the savings of the public, capable employers are expected to establish a Pension Fund in its company, become a partner of a Pension Fund establisher, or include its employees in Financial Institution Pension Fund. ARTICLE BY ARTICLE Article 1 Number 1 until 24 Article 2 Article 3 Article 4 19

Article 5 Stipulation as referred to in this paragraph is needed as a part of requirement to establish Pension Fund, which is then used for application of approval of Pension Fund as a legal entity. Letter a Letter b Letter c In order for Pension Fund Regulation to be legally binding to employer and enforceable in the company, employer must state its desire in writing as the evidence of its willingness to establish Pension Fund. Provision of pension program for employees begins from promise of employer. In order for fulfillment of the promise to be in accordance with stipulation of this Law, the promise must be stated in Pension Fund Regulation determined by employer as the establisher, after obtaining opinions and suggestions from employees. Employer Pension Fund is a legal entity that has manager and supervisory board with tasks and authorities as stipulated in this Law. In order for the persons given the tasks and authorities to be known clearly, establisher must make a decision about appointment of manager and supervisory board. In addition, in order to protect the asset of Pension Fund, a custodian needs to be appointed. Custodian is a bank that provides custodianship service as referred to in Law on banking that is responsible for the security of storage of Pension Fund asset saved separately from the asset of the custodian and the asset must be released from any charge arising against the custodian. Employer Pension Fund can also be established by more than 1 (one) employers that: a. have the same type of activity or business; b. are included in 1 (one) business group with the same ownership; c. are based on practicality and efficiency consideration, or other reasons. In this case, Pension Fund Regulation is determined by one of the employers as establisher, after obtaining opinions and suggestions from employees. The other employer as establisher partner states its willingness to be subject to and enforce the Pension Fund Regulation in its company, meaning that the establisher partner is bound by all stipulations of the Pension Fund Regulation. Government Regulation as referred to in this paragraph stipulates various provisions that must be contained in Pension Fund Regulation, as follows: a. the formula to determine the amount of pension benefit, contribution and all factors affecting its calculation; b. rights and obligations of participants, establisher and, if any, establisher partner; c. formation of fund that is separated from asset of employer, which is clearly the asset of Pension Fund; d. procedure of amendment to Pension Fund Regulation; 20