KARACHI: The State Bank of Pakistan (SBP) has allowed non-resident Pakistanis to contribute in pension funds.
In a round issued to banks/Authorized Dealers (ADs) on August 05, 2022, the SBP stated in order to enhance the worth proposition of NRP Rupee Value Account (NRVA) and facilitating the non-resident Pakistanis (NRPs), it has been determined to permit NRPs to contribute in pension funds, approved by the Securities and Exchange Commission of Pakistan (SECP) underneath Voluntary Pension Funds Rules 2005 (VPS Rules), by means of their Authorized Dealers. Accordingly, following amendments in Foreign Exchange Regulations have been made:
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Para 8 (iv)(a) of Chapter 8- following new sub-clause has been added:
8. Contribution in items of Pension Fund approved in phrases of VPS Rules, underneath the administration of Pension Fund Managers (PFMs) registered with SECP.
Para 8 (iv)(a) of Chapter 8- current textual content has been amended as:
The switch of funds for the above investments shall be allowed by the ADs by means of the particular directions obtained from NRVA holder in this behalf. For investments/ contribution talked about at (1),(2),(5),(6),(7) & (8) above, the process prescribed for funding/ disinvestment/ redemption in Chapter 20 of the Foreign Exchange Manual shall be adopted whereas for funding talked about at (3) above, the phrases and circumstances prescribed at Annexure-A, on the finish of this chapter, shall be adopted.
Para 6 (B) of Chapter 20- following new clause has been added:
(IIIC) Issue of items of Pension Fund approved by SECP in phrases of Voluntary Pension Funds Rules 2005, underneath administration of Pension Fund Managers (PFMs) registered with SECP to undertake pension fund scheme enterprise.
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Para 9 of Chapter 20- following new clause has been added:
(E) Contribution in Units of approved Pension Funds
NRP Rupee Value Account (NRVA) holders are allowed to contribute in pension funds, approved in phrases of Voluntary Pension Funds Rules 2005, underneath the administration of Pension Fund Managers (PFMs) registered with SECP, by means of NRVA opened with an Authorized Dealer (AD) in Pakistan. Such contribution will be made in following method:
Funds out there in NRVA can be utilized for contribution in pension funds and fee for such contribution could also be debited from the account on the precise request of the NRVA holder for onward credit score to the checking account of trustee of the pension fund. The Net Asset Value (NAV) allotted with respect to every contribution together with copy of fee instrument/ particulars shall be supplied by the PFM to the AD on the identical day. PFM shall additionally ship account assertion to the AD inside 24 hours of the belief of funds.
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In case of switch of particular person pension account of the NRVA holder from one pension fund to a different pension fund of the identical PFM, the PFM will share the small print of the switch transaction (together with all particulars as reported for switch from one pension fund to a different fund) for his or her document of AD.
In case of switch of particular person pension account of the NRVA holder from one PFM to a different PFM, the PFM will share the small print of the switch transaction (together with all particulars as reported for switch from one PFM to a different PFM) for document of AD.
Redemption proceeds could also be credited to respective NRVA, obtained from trustee of pension fund on account of redemption of items earlier contributed by participant by means of these accounts or bonus items issued thereon. The particulars of the identical shall be shared by the Trustee of pension fund/ PFM with the AD.
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The AD shall be sure that all issuance and redemptions are going down at prevalent NAV introduced publicly by the related PFM.
The banks shall keep the whole reconciliation of quantity transferred/obtained to/from trustee of pension fund, items contributed/redeemed by the participant there-against, and make sure the compliance of all associated international alternate rules.
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