Abstract
This study seeks to investigate whether larger pension funds exhibit better investment performance than smaller ones and differences in the selection of investment instruments between large and small pension funds. Our research sample is 13 pension funds that are the members of BKS Dapen-KI (Badan Kerja Sama Dana Pensiun Kristen Indonesia – the Cooperation Council of Christian Pension Fund in Indonesia) in 2010-2017. We use the quantitatively descriptive and independent-sample t-test methods. The results indicate no significant difference between the performance of large and small pension funds likely because both pension fund types have relatively similar total assets. However, large and small pension funds have exhibit different investment instruments selection.
Highlights
The Indonesian population exhibits increasing awareness of the importance of old-age planning in line with a huge transition from a communal agrarian society to a more individualistic industrial society
This study focuses on pension funds that are the members of BKS Dapen-KI (Badan Kerja Sama Dana Pensiun Kristen Indonesia – the Cooperation Council of Christian Pension Fund in Indonesia) that mostly are DPPK PPMP
This study aims to analyze whether large and small pension funds selected investment instruments differently and to investigate whether large pension funds had better investment performance than small pension funds
Summary
The Indonesian population exhibits increasing awareness of the importance of old-age planning in line with a huge transition from a communal agrarian society to a more individualistic industrial society. Employers need to offer old-age allowances in the form of partial payments to their employees. These old-age allowances are commonly known as pension programs. From the perspective of the national economy, pension funds are crucial for economic development and growth. Due to its crucial role, governments strictly regulate the pension fund industry. According to Srinivas, Whitehouse, and Yermo (2000), governments’ policies largely focus on three aspects, namely performance, industry structure, and asset allocation /investments. Government regulations strictly regulate the quantitative and qualitative limitations of pension funds’ investments that are closely associated with performance that potentially offer guaranteed benefits to pension fund members
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