Retirement income security: SECP approves new annuity products

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has approved several new annuity products to strengthen retirement income security and support the development of Pakistan’s annuity market.

The approved products include life-contingent annuities, deferred annuities, annuities with guaranteed payments, and hybrid annuity structures combining guaranteed and lifetime income benefits.

These products will help retirees convert their accumulated savings into a regular and predictable income stream after retirement, reducing financial uncertainty in later years.

The decision follows consultations with stakeholders in the insurance sector and addresses a key gap in Pakistan’s retirement framework. Traditionally, retirement savings products in the country have focused mainly on the accumulation of savings during a person’s working life, while limited options have been available to convert those savings into steady post-retirement income. This gap has increased financial risks for retirees, particularly in the context of rising life expectancy and persistent inflation.

The newly approved annuity products are designed to provide flexible retirement income options. Life-contingent annuities provide payments for the lifetime of the annuitant, while deferred annuities begin payments after a specified deferment period. Annuities with guaranteed payments ensure regular income for a fixed period, and hybrid annuity structures combine guaranteed payments with lifetime income benefits.

The products will be offered by conventional life insurance companies as well as Window Takaful and full-fledged Takaful operators, ensuring availability in both conventional and Shariah-compliant segments. Additional insurers are expected to introduce similar products in the coming months.

The initiative is also aligned with the government’s broader policy direction of shifting from defined-benefit pension systems to defined-contribution pension schemes, where annuities play a key role in converting retirement savings into stable and predictable income streams.

Copyright Business Recorder, 2026