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SECP permit Postal Life Insurance Ltd to manage private pension funds

by News Desk
November 18, 2021
in Business, Economy, Main
Reading Time: 2 mins read
SECP permit Postal Life Insurance Ltd to manage private pension funds
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For the first time in Pakistan, a life insurance company has been allowed to manage private pension funds. Securities & Exchange Commission of Pakistan (SECP) granted the permit to Postal Life Insurance Company Limited under the Voluntary Pension System Rules, 2005.

The Press Realease was Released on November 17th by Securities & Exchange Commission of Pakistan.

It stated that SECP registers Pakistan’s first Life Insurance Company as the Pension Fund Manager. And the Life Insurance Company SECP permit is named Postal Life Insurance Company Limited. Postal Life has been permitted to manage private pension funds under the Voluntary Pension System (VPS), which are regulated by SECP under the terms of VPS Rules formed on 2005.

These Private Pension Funds are self-contributory, tax advantaged long-term saving schemes, whereby individuals can voluntarily contribute to a pension fund during their working life to have a regular income after retirement. And also, the employer can also contribute on the behalf of their employees.

For the first time in Pakistan, a life insurance company has been allowed to manage private pension funds. SECP granted permission to Postal Life Insurance Company Limited under the Voluntary Pension System Rules, 2005. pic.twitter.com/4XuMji97x8

— SEC Pakistan (@SECPakistan) November 18, 2021

This step was taken by SECP considering the need and importance of private pensions in Pakistan’s context, the SECP has undertaken various regulatory reforms for the development of Private Pension’s sector. Reforms includes revamping the investment framework and raising awareness of the need for private pensions, especially in case of private sector workers. This has translated into a year-on-year growth of 27% in asset under management ffrom Pkr 31.4 billion to Pkr 39.7 billions as of June 30, 2021 and the now inclusion of first life insurance company to undertake pension fund management services.

The SECP stated that, it aims to continue its reform agenda for the development of the private pension and annuity market in Pakistan. SECP states that it is currently working on the development of annuity regulatory framework for the asset management sector and bringing structural reforms in VPS in line with 401(K) plan of the United States.

A 401(k) is a retirement savings and investing plan that employers offer. A 401(k) plan gives employees a tax break on money they contribute. Contributions are automatically withdrawn from employee paychecks and invested in funds of the employee’s choosing (from a list of available offerings).

The SECP further stated that, it is also engaged with the Mutual Fund Association Pakistan (MUFAP), professional associations and other stakeholders to corroborate efforts for increasing awareness of Voluntary Pension System (VPS).

Tags: Life InsurancePension funds
News Desk

News Desk

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