ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) Chairman Akif Saeed on Wednesday formally launched the new pension system for the civil servants of Khyber Pakhtunkhwa (KP).

Speaking at a ceremony to mark the implementation of the Voluntary Pension System (VPS) in Peshawar, Mr Saeed said that it was a significant step towards efficient management of the fiscal space for any government.

The KP government initiated the process to shift its civil servants to this new pension system last November.

The SECP chief said that the public sector has been burdened by the growing pension bills and the new scheme has been launched in collaboration with the Mutual Fund Association of Pakistan.

The new system has been launched for those employees who have joined the government service in the province on or after June 7, 2022, and it is anticipated that around 33,000 civil servants will join the new pension regime.

Mr Saeed said that the transition to the modern pension system is the need of the hour for all provincial and federal government departments to manage their financial resources.

He lauded the KP government for taking the initiative and said the move would provide a sense of relief to participants by offering a viable substitute for the government-defined pension regime while at the same time reducing government expenditures.

KP Secretary of Finance Amer Sultan Tareen praised the SECP’s role in the smooth implementation of the new pension system in the province.

He highlighted the significant increase in provincial pension expenditures over the past two decades and said they had reached Rs132 billion in 2023-24 from Rs878m in 2003-04.

Mr Tareen said that from less than one per cent of the total consolidated budget to over 12pc in 2023-24, it was necessary to launch the new pension system to professionally manage the pension framework for the provincial government’s sustainability.

SECP Commissioner Mujtaba Ahmed Lodhi urged pension fund managers and trustees to modernise the pension system to meet future demands.

Mutual Fund Association of Pakistan Chief Executive Officer Mashmooma Z. Majeed explained investors’ journey from joining to retirement and post-retirement benefits.

Under the new pension system, the KP government has engaged 12 pension fund managers.

They are ABL Asset Management Company Ltd, AL Habib Asset Management Ltd, Al Meezan Investment Management Ltd, Alfalah Asset Management Ltd, Atlas Asset Management Ltd, Faysal Asset Management Ltd, HBL Asset Management Ltd, JS Investments Ltd, MCB Investment Management Ltd, National Investment Trust Ltd, NBP Fund Management Ltd and UBL Fund Managers Ltd.

Published in Dawn, November 23rd, 2023