Taspen maintains profitability with strategic investments

It maintained a strong solvency ratio of 497% as of end-2023

PT Taspen (Persero) has consistently been profitable over the past five years, with net income rising to $49.11m (IDR805b) in 2023 from $6.95m (IDR114b) in 2022, driven by lower THT benefit payments and higher investment income, Fitch Ratings noted in an insight.

Its contributions are insufficient to meet expected claims, with the state bearing the risk. Since 2009, all JP claims have been paid from the state budget, totalling $7.38b (IDR121t) in 2023.

Taspen maintains a strong solvency ratio of 497% as of end-2023, well above the 100% minimum requirement, providing a robust capital base.

Taspen’s investment activities are strictly regulated by the MoF, focusing on government and SOE bonds, corporate bonds, stocks, and mutual funds.

Fully state-owned, Taspen is supported by the government, with six of its seven commissioners representing various government bodies. The government ensures support for Taspen’s obligations to civil servants through regulations.

Taspen's contributions mainly come from civil servants' salaries for pension (JP) and elderly savings (THT) programs, accounting for 54% and 35% respectively in 2023. The government also contributes to death benefit (JKM) and working accident benefit (JKK) programs.

Employee expenses accounted for 9% of the total state budget in 2023, with JP claims alone taking up 5%, surpassing subsidies in other sectors.

Fitch rates Taspen’s business profile as 'Most Favourable' but corporate governance as 'Less Favourable' due to investment mismanagement allegations, which led to the dismissal of Taspen's president director in March 2024.

($1.00 = IDR16,311)