ISLAMABAD – The Securities and Exchange Commission of Pakistan (SECP) has allowed Investment Advisors licensed by the SECP to offer Employer Pension Funds.
This shall be achieved as a part of the brand new “Employer Pension Funds and permitting Asset Management Companies (AMCs) to offer annuity funds of pension below the Voluntary Pension System” idea, for which SECP has additionally begun a 14-day public session interval. The newly launched idea of Employer Pension Funds will deal with the reluctance of employers to offer VPS in addition to present higher portability and suppleness to contributors. Retaining the first 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 revealing the expense ratios and administration payment on Mutual Funds Association of Pakistan (MUFAP) and Asset Management Companies’ web sites, together with elimination of requirement to publish rankings on MUFAP website online. Through these amendments, the observe of charging promoting and advertising and marketing bills to pension funds shall be discontinued. Moreover, as well as to Life Insurance Companies which are mandated to offer life contingent annuities to VPS contributors on the time of their retirement, Asset Management Companies shall additionally have the ability to offer such annuities to VPS contributors topic to situations laid down by the Commission.
A vibrant and financially-inclusive VPS trade will create a pool of long-term affected person capital which might 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 revenue for retirees. Currently, the VPS trade in Pakistan includes of 12 registered pension fund managers managing 21 pension funds in typical and shariah compliant mode with belongings below administration of Rs. 39.6 billion. Presently, solely round 45,000 people take part within the voluntary, tax advantaged, contributory pension system established below the Voluntary Pension System Rules, 2005.