ISLAMABAD, (UrduPoint / Pakistan Point News – eighth Sep, 2021 ) :Cognizant of the challenges to the expansion and growth of voluntary funded pension system in Pakistan, the Securities and Exchange Commission of Pakistan (SECP) has revamped the Voluntary Pension System (VPS) Rules, 2005, facilitating higher pension penetration in Pakistan.
Private pension funds established below the VPS Rules are professionally managed savings-cum-investment vehicles, that allow salaried and self-employed Pakistanis (together with non-resident Pakistanis) to contribute throughout their working life, to build up financial savings obtainable after retirement, stated a press launch issued right here.
The reforms, whereas sustaining the flexibleness of individualized asset allocation, have launched quite a lot of measures together with simpler transferability between pension fund managers and funds, added flexibility to fund managers to allocate numerous bills throughout the whole permissible expense restrict, permitting pledging of pension account towards employer loan and removing of SECP’s prior approval for VPS ads.
Furthermore, as a way to streamline changes in necessities over time, issues associated to pricing, obligations and efficiency of pension funds have been shifted from Voluntary Pension System Rules to the Non-Bank Finance Companies Regulations, 2008.
These reforms represent an necessary step ahead in making certain safety for the aged, whereas safeguarding its sustainability sooner or later. It is anticipated that the revamped framework is not going to solely pave the best way for the expansion of personal pension funds, but in addition improve monetary inclusion and supply much-needed depth to Pakistan‘s capital markets.