SECP chief reaffirms pledge to expand penetration of pension schemes

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SECP

ISLAMABAD: The SECP Chairman Aamir Khan has reaffirmed SECP’s commitment for increasing penetration of Voluntary Pension System (VPS). Aamir khan was speaking to a webinar, organized by the SECP to increase awareness about VPS in the corporate sector and among professionals, says a Press release.
Pointing towards the pension situation in Pakistan, the Chairman shared various reforms that the SECP has undertaken to encourage both employers and self-employed professionals to participate in VPS, which include broadening of investment avenues for VPS by allowing them to invest in REITs, private funds, and ETFs, facilitating investors by allowing passive investment strategies, and flexibility in changing fund and/or fund manager.
The participants discussed the challenges and opportunities in the private pension market and provided suggestions to improve the uptake of VPS. The panelists discussed in detail how VPS was a better alternative to conventional/terminal benefit schemes like provident/gratuity funds, and could provide the basis for a more sustainable pension system.
Ms. Khalida Habib, Executive Director, Specialized Companies Division briefed the participants about recently introduced amendments in the relevant regulations. The regulations were amended to provide ease of doing business by reducing the number of regulatory approvals and removing duplications and eliminating redundancies.
The webinar discussion panel comprised of SECP officials, senior professionals, academics and industry leaders including Dr. Nadeem Ul Haque, Vice Chancellor, PIDE, Yasir Qadri, Chief Executive, UBL Funds, Abdul Rehman Warraich and Aquil Raza Khoja, former GM Punjab Pension Fund.
VPS is a tax-advantaged scheme open to all Pakistanis, whether salaried or self-employed. It also provides an individual retirement account that is not affected by change in employment, i.e. a participant continues to retain the pension account as opposed to starting afresh with an occupational retirement plan at the time of switching jobs. Pakistan’s VPS sector, over the years, has exhibited promising growth, with 22 pension funds amounting to PKR 40 billion, having around 45,000 individual investors.