ISLAMABAD: Postal Life Insurance Company Limited (PLICL) has been granted permission by the Securities and Exchange Commission of Pakistan (SECP) to manage private pension funds under the Voluntary Pension System (VPS).
PLICL is the first life insurance company to be granted the permission by the SECP.
Private pension funds under the VPS are regulated by the SECP according to the VPS Rules, 2005; they are self-contributory, tax advantaged long-term savings schemes, whereby individuals can voluntarily contribute to a pension fund during their working life to have a regular income after retirement.
The employer can also contribute on behalf of their employees.
Considering the need and importance of private pensions in Pakistan’s context, the SECP has undertaken various regulatory reforms for the development of this sector.
These include 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 per cent in asset under management from Rs31.4 billion to Rs39.7bn as of June 30, 2021 and the inclusion of PLICL to undertake pension fund management services.
The SECP aims to continue its reform agenda for the development of the private pension and annuity market in Pakistan.
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.
The SECP is also engaged with the Mutual Fund Association of Pakistan, professional associations and other stakeholders to corroborate efforts for increasing awareness of VPS.
Published in Dawn, November 18th, 2021