AIRLINK 75.00 Decreased By ▼ -0.25 (-0.33%)
BOP 5.14 Increased By ▲ 0.03 (0.59%)
CNERGY 4.49 Decreased By ▼ -0.11 (-2.39%)
DFML 34.08 Increased By ▲ 1.55 (4.76%)
DGKC 89.91 Decreased By ▼ -0.44 (-0.49%)
FCCL 22.72 Decreased By ▼ -0.26 (-1.13%)
FFBL 33.04 Decreased By ▼ -0.53 (-1.58%)
FFL 9.88 Decreased By ▼ -0.16 (-1.59%)
GGL 11.09 Increased By ▲ 0.04 (0.36%)
HBL 115.34 Increased By ▲ 0.44 (0.38%)
HUBC 136.40 Decreased By ▼ -0.94 (-0.68%)
HUMNL 9.98 Increased By ▲ 0.45 (4.72%)
KEL 4.63 Decreased By ▼ -0.03 (-0.64%)
KOSM 4.72 Increased By ▲ 0.02 (0.43%)
MLCF 40.00 Decreased By ▼ -0.54 (-1.33%)
OGDC 140.35 Increased By ▲ 0.60 (0.43%)
PAEL 27.50 Decreased By ▼ -0.15 (-0.54%)
PIAA 25.10 Increased By ▲ 0.70 (2.87%)
PIBTL 6.82 Decreased By ▼ -0.10 (-1.45%)
PPL 123.80 Decreased By ▼ -1.50 (-1.2%)
PRL 27.38 Decreased By ▼ -0.17 (-0.62%)
PTC 14.05 Decreased By ▼ -0.10 (-0.71%)
SEARL 60.00 Decreased By ▼ -1.85 (-2.99%)
SNGP 72.35 Decreased By ▼ -0.63 (-0.86%)
SSGC 10.45 Decreased By ▼ -0.14 (-1.32%)
TELE 8.69 Decreased By ▼ -0.09 (-1.03%)
TPLP 11.52 Decreased By ▼ -0.21 (-1.79%)
TRG 66.25 Decreased By ▼ -0.35 (-0.53%)
UNITY 25.75 Increased By ▲ 0.60 (2.39%)
WTL 1.41 Decreased By ▼ -0.03 (-2.08%)
BR100 7,842 Increased By 39.4 (0.5%)
BR30 25,705 Decreased By -110.6 (-0.43%)
KSE100 74,800 Increased By 268.9 (0.36%)
KSE30 24,101 Increased By 146.2 (0.61%)

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) on Wednesday allowed Investment Advisors licensed by the SECP to offer Employer Pension Funds.

This will be done as part of the new “Employer Pension Funds and allowing Asset Management Companies (AMCs) to offer annuity payments of pension under the Voluntary Pension System” concept, for which the SECP has also begun a 14-day public consultation period.

The newly-introduced concept of Employer Pension Funds will address the reluctance of employers to offer VPS as well as provide greater portability and flexibility to participants. Retaining the primary structure of pension funds, the Employer Pension Funds will have flexible seed capital requirements as well as bilaterally agreed expense ratios with no sales load chargeable to participants.

Similarly, there shall be no requirement of disclosing the expense ratios and management fee on Mutual Funds Association of Pakistan (MUFAP) and Asset Management Companies’ websites, along with removal of requirement to publish rankings on MUFAP web site. Through these amendments, the practice of charging selling and marketing expenses to pension funds shall be discontinued.

Moreover, in addition to Life Insurance Companies that are mandated to offer life contingent annuities to VPS participants at the time of their retirement, Asset Management Companies shall also be able to offer such annuities to VPS participants subject to conditions laid down by the Commission.

A vibrant and financially-inclusive VPS industry will create a pool of long-term patient capital which can deepen the country’s capital markets, improve the current saving rate of 4.5 percent of Gross Domestic Product in Pakistan and provide a reliable stream of income for retirees.

Currently, the VPS industry in Pakistan comprises of 12 registered pension fund managers managing 21 pension funds in conventional and Shariah compliant mode with assets under management of Rs 39.6 billion. Presently, only around 45,000 individuals participate in the voluntary, tax advantaged, contributory pension system established under the Voluntary Pension System Rules, 2005.

Copyright Business Recorder, 2022

Comments

Comments are closed.