Page 84 - SUSTAINABILITY ISSUES & COVID-19

No. Principles Application Gap
Make decisions objectively and free Investment Management has conducted the Corresponding
from any pressure from any party performance analysis and provided suggestions or
recommendations to the Strategic Committee for
consideration to produce objective decisions
5. Equality and Fairness Opportunities to provide input and opinions Corresponding
are conveyed by Participants through the media
provided, namely telephone, letters, semester
magazine media, or through representatives of
regional pension fund participants.

Based on the analysis in Table 1, we find that AKM Pension Fund has met three principles, namely responsibility,
independence, and fairness. Article 3 POJK Number 16 / POJK. 05/2016 explains that pension funds in implementing their
governance guidelines are guided by the principles of good Pension Fund governance, which include independence,
transparency, accountability, responsibility, and fairness. In fulfilling the principle of responsibility, in particular, the
AKM Pension Fund has prepared a previously Portfolio Placement Allocation Plan through an analysis note prepared
by the Investment Management Division. The process of allocating assets to the AKM Pension Fund is supervised by
the Strategic Committee, whose function is to provide recommendations to the Management regarding proposals for
placement or disposal of investment instruments from the Investment Management to obtain the best results. Every
new investment placement by the AKM Pension Fund has been reviewed by the Investment Management Division by
assessing the feasibility of the asset instrument to be invested, namely, the return given and adjusted to the Pension
Fund liability profile. AKM Pension Fund has also prepared investment guidelines that regulate the implementation of
the placement of an asset following the criteria that must be met in each asset instrument.

However, in applying the principles of transparency and accountability, the AKM Pension Fund still does not comply
with OJK regulations. In applying the principle of transparency, the AKM Pension Fund has not disclosed its investment
management information in a timely and adequate manner through its website to Participants. In applying the
principle of accountability, AKM Pension Fund does not yet have employees to carry out its risk management unit
function and the Internal Audit Unit Head considering that pension funds managed of more than IDR 500 billion. In
the application of accountability, the Management and supervisory board performance appraisal is carried out by the
Founders and the employees are carried out by the Management. Although the performance appraisal of employees
has been running, the provision of reward and punishment has not been documented so far.

In implementing code of ethics, we find that the AKM Pension Fund has the code of ethics as a code of conduct in
pension fund governance. Article 2 POJK Number 16 / POJK. 05/2016 explains that pension funds must apply
governance guidelines, including a code of conduct following generally accepted practices. Following the POJK
regulations, pension funds must apply ethics in managing pension funds.

Furthermore, to comply with the rules of conduct in the conflict of interest component, the AKM Pension Fund has
a code of conduct guidelines which stipulate that the management, supervisory board, and employees must not
have interests outside the interests of the Pension Fund, either directly or indirectly in carrying out their duties and
obligations because affect the objectivity of decision making. This is supported by the process of making investment
placement decisions that are carried out through an analysis process documented by the Investment Management
Division first which is then reviewed by the Strategic Committee.

This is following the stewardship theory which states that the executive manager is not an ambitious individual but
wants to do a good job, to be a good steward for the company. In this case, the management of the AKM Pension Fund
behaves in the common interest and avoids conflicts of interest with other parties to achieve the goals or objectives of
the pension fund.

4.2 AKM Pension Fund Allocation
Implementation of asset allocation AKM pension fund has a process through stages such as planning, implementation,
and monitoring and evaluation. Based on the analysis of the Revenue and Expenditure Budget Work Plan (RKAPB)
document, OJK Regulation Number 29 / POJK. 05/2018 and POJK Number 36 / POJK. 06/2016 obtained the following
results.

International Conference on Sustainability 83
(5 Sustainability Practitioner Conference)
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