JAKARTA - Pension fund management in Indonesia needs to be redesigned in order to create an adequate pension system in line with international best practises, said the Ministry of Finance's Director-General of Budget Askolani.

According to Mr Askolani, pension funds are yet to play a significant role in Indonesia's financial sector, despite the pension fund industry having grown from Rp 561 trillion in 2014 to Rp 834 trillion in 2017. He explained that pension funds so far only make up 2.5% of the Indonesian financial sector, which is still dominated by the banking industry.

"The data shows that there is still plenty of room for potential growth in Indonesia's pension fund industry. We are very open to suggestions from all panelists and participants in a sharing session regarding how to promote and design the Indonesian pension system in the future," Mr Askolani said in a webinar titled "Designing the Optimum Ecosystem of Pension", Thursday (22/10).

To achieve its maximum potential, Mr Askolani said, pension funds must be managed adequately and prudently. In addition, pension fund management also needs to involve proper investment governance, effective risk management, transparency, accountability, and strong monitoring. (MS)