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Voluntary Pension System ‘Features, Issues and Prospects’. Muhammad Afzal NBFC Department Securities and Exchange Commission of Pakistan . SECP Mandate. 2002: Part VIIIA of the Companies Ordinance, 1984 ( Section 282A-282N ) NBFC Rules and Regulations.
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Securities and Exchange Commission of Pakistan
2002: Part VIIIA of the Companies Ordinance, 1984 (Section 282A-282N) NBFC Rules and Regulations.
2003: Section 20(4)(V) of SECP Act, 1997:
“Promoting and regulating development of Private Pension Schemes/ Funds”.
2004: VPS was notified as form of Business under section 282A of Companies Ordinance.
2005: The VPS Rules were notified
Income Tax Ordinance, 2001 governs any taxation matters concerning VPS.
Insurance Ordinance, 2000: Insurance Ombudsman appointed under section 125 of the Ordinance has the powers to hear and decide any disputes between participants and the pension fund manager.
VPS is a regulated. The Rules prescribe:-
Investment in short term debt securities with average portfolio duration not exceeding one year
(*rated on not rated)
Investment in debt securities with weighted average duration up to 10 years
Federal Government Securities: 50% Min.
Investment in other securities, lower of:-
Shariah compliant debt securities with weighted average duration up to 10 years
(Each of the Funds has three sub-funds)
In 2008SECP mandate extended to regulate private occupational savings schemes
Section 20(4)(W) of SECP Act:
“ promoting and regulating any scheme, fund, arrangement or undertaking (including but not limited to pension, superannuation gratuity and provident funds and schemes) established by or on behalf of companies and state-owned corporations as employers, for entitlement of post employment benefits of their employees.”
For promotion of VPS:
A document titled “Participants’ guide to Voluntary Pension System” has been prepared.
Operational and structural issues are being addressed based on feedback from the industry
The Commission framed “ The Employees Provident Funds (Investment In Listed Securities) Rules, 1996 which prescribed conditions for investment in listed securities by PF as follows:
Investments not to increase 5% of paid up capital of a company
Investment in shares of only such