ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) on Wednesday introduced amendments to Voluntary Pension System (VPS) Rules, 2005 with the intention to bring reforms to facilitate greater pension penetration in the country.
The SEC Pakistan said that private pension funds established under the VPS Rules are professionally managed saving-cum-investment vehicles, that enabled salaried and self-employed Pakistanis (including non-resident Pakistanis) to contribute during their working life, to accumulate savings available after retirement.
The regulator said that the reforms while maintaining the flexibility of individualized asset allocation, have introduced a number of measures including easier transferability between pension fund managers and funds, added flexibility to fund managers to allocate various expenses within the total permissible expense limit allowing pledging of pension account against employer loan and removal of SECP’s prior approval for VPS advertisement.
Furthermore, in order to streamline adjustment in requirements over time, matters related to pricing, obligation, and performance of pension funds have been shifted from Voluntary Pension System Rules to the Non-Bank Finance Companies Regulations, 2008.
The SEC Pakistan said that the reforms constitute an important step forward in ensuring protection for the elderly while safeguarding its sustainability in the future.
It is expected that the revamped framework will not only pave the way for the growth of private pension funds, but also enhance financial inclusion and provide much needed dept to Pakistan’s capital markets.
