SECP To Allow Licensed Investment Advisors To Offer Employer Pension Funds

ISLAMABAD, (UrduPoint / Pakistan Point News – twenty ninth Jun, 2022 ) :The Securities and Exchange Commission of Pakistan (SECP) has allowed funding advisors licensed by the SECP to supply Employer Pension Funds.

This will likely be carried out as a part of the brand new “Employer Pension Funds and permitting Asset Management Companies (AMCs) to supply annuity funds of pension underneath the Voluntary Pension System” idea, for which SECP has additionally begun a 14-day public session interval, mentioned a press launch issued right here.

The newly launched idea of Employer Pension Funds will deal with the reluctance of employers to supply VPS in addition to present higher portability and suppleness to contributors.

Retaining the Primary construction of pension funds, the Employer Pension Funds may have versatile seed capital necessities in addition to bilaterally agreed expense ratios with no gross sales load chargeable to contributors.

Similarly, there shall be no requirement of exposing the expense ratios and administration price on Mutual Funds Association of Pakistan (MUFAP) and Asset Management Companies’ web sites, together with elimination of requirement to publish rankings on MUFAP net site.

Through these amendments, the observe of charging promoting and advertising bills to pension funds shall be discontinued.

Moreover, along with Life Insurance Companies which can be mandated to supply life contingent annuities to VPS contributors on the time of their retirement, Asset Management Companies shall additionally be capable of provide such annuities to VPS contributors topic to circumstances laid down by the Commission.

A vibrant and financially-inclusive VPS industry will create a pool of long-term affected person capital which may deepen the nation’s capital markets, enhance the present saving price of 4.5% of Gross Domestic Product in Pakistan and supply a dependable stream of earnings for retirees.

Currently, the VPS industry in Pakistan contains of 12 registered pension fund managers managing 21 pension funds in typical and shariah compliant mode with belongings underneath administration of Rs. 39.6 billion. Presently, solely round 45,000 people take part within the voluntary, tax advantaged, contributory pension system established underneath the Voluntary Pension System Rules, 2005.