Pensioners to Get New Investment Option

Meanwhile, the Securities and Exchange Commission of Pakistan (SECP) has introduced a Passive Equity Sub-Fund under the Voluntary Pension Scheme (VPS), offering savers a low cost way to invest in the stock market from January 1, 2027.

Key points

• The management fee for an ETF-based Passive Equity Sub-Fund will be capped at 0.75 percent per year.
• Pension fund managers will be required to offer the new sub-fund alongside existing Equity, Debt and Funds Market Sub-Funds.
• Pension fund managers can manage the new sub-fund by tracking a market index directly or investing in exchange traded funds (ETFs).
• Kabir Ahmed Sidhu remarked the new sub-funds would provide pension savers more choice in managing retirement savings and provide a cost-efficient way to participate in the stock market.
• Obtain the latest business news, market insights, and economic updates wherever you prefer.

Pension fund managers will be required to offer the new sub-fund alongside existing Equity, Debt and Funds Market Sub-Funds. The option will allow savers to choose between actively managed equity funds and passive funds that track a specified market index.

Pension fund managers can manage the new sub-fund by tracking a market index directly or investing in exchange traded funds (ETFs). Under the ETF-based option, managers can invest in equity ETFs listed on the Pakistan Stock Exchange, providing diversified exposure to the equity market. SECP Sets Deadline for Firms to Hold AGMs.

Notably, the management fee for an ETF-based Passive Equity Sub-Fund will be capped at 0.75 percent per year. If a pension fund manager invests in ETFs managed by its own asset management firm, it cannot charge an further management fee, avoiding two layers of fees on the same investment.

SECP Chairman Dr. Kabir Ahmed Sidhu remarked the new sub-funds would provide pension savers more choice in managing retirement savings and provide a cost-efficient way to participate in the stock market.

He remarked the reform would backing wider participation in the voluntary pension system and strengthen long-term retirement savings. Stay Connected with ProPakistani.

Obtain the latest business news, market insights, and economic updates wherever you prefer. Follow on Google Discover. Follow on Google News Join WhatsApp. See more ProPakistani stories in Google Search and Top Stories.

For now, pensioners to Get New Investment Option remains the part of the story worth watching, and further updates are likely as more details are confirmed.