12
seems
that
the
plan
administrator
restricted by the regulation and guidelines, they still
have
the
authority to
decide
the
most
profitable
and
secure
investment.
The
regulation
and
guidelines only
give a
general restriction;
therefore,
it
gives the plan administrator
the freedom to manage their investment.
2.1.2 Laws and regulation for Pension Fund
Pension Fund in Indonesia regulated under the Pension Fund Law No.11 Year 1992.
According to the law, Pension Fund acknowledged as a legal entity that has the purpose
of
managing
the
pension
fund
program.
‘The entity
treated
as
a
separate
legal
and
accounting entity for which a set of books maintained and financial statements are
prepared' (Kieso,
Weygandt,
and
Warfield,
2004,
p1019).
The
separations
between
the
pension fund wealth with the wealth of its plan sponsor are important to assure the safety
of the pension benefit.
Financial accounting standard regulates the
accounting for pension fund for the plan
sponsor
and the
pension
fund
itself.
Financial
accounting standard
that
regulates
the
pension fund financial report are:
PSAK
no.18,
which
regulates
accounting
treatment
and
reporting
for
Pension
Fund
PSAK no. 24, which regulates the pension benefit cost.
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