by 📢 SECP Invites Public Comments on Proposed Amendments to Voluntary Pension System (VPS) Rules
The Securities and Exchange Commission of Pakistan (SECP) has taken yet another proactive step to strengthen the Voluntary Pension System (VPS) by announcing draft amendments and inviting public feedback. Here’s what you need to know:
📝 1. What’s on the Table?
Under the proposed changes, pension fund managers would be required to:
- Alert participants approaching retirement age, giving them clarity and sufficient time to make informed decisions.
- Explain retirement options, including choices between withdrawing funds, transferring to a lower-volatility scheme, or continuing contributions.
- These amendments reflect corporate-style responsibility towards pensioners, ensuring no one is left uninformed as they near retirement.
Currently, participants can choose to retire between ages 60–70 or after 25 years of contributions. The proposed changes aim to reinforce this with more transparent and timely communication.
📅 2. Why It Matters
- Empowering participants: Many subscribers remain uncertain about post-retirement options. A reminder framework standardizes support across all funds.
- Minimizing confusion: As retirement approaches, clarity is key. These amendments aim to prevent last-minute surprises or delays.
- Aligning with global best practices: This move brings Pakistan closer to mature pension markets, where such communication is standard.
💬 3. Public Input Process
- The regulatory notice explicitly asks for public comments on these draft amendments.
- While exact deadlines aren’t mentioned in the SECP release, stakeholders are encouraged to respond promptly—typically within 15–30 days of the notice.
- Participants, employers, pension fund managers, financial advisers, and analysts are all welcome to voice their support, concerns, or suggestions.
👥 4. Who Should Weigh In?
- Individual participants, particularly those nearing retirement.
- Employer pension schemes offering VPS to employees.
- Pension Fund Managers & NBFCs, who will see increased administrative obligations.
- Financial advisors and industry bodies, who can highlight practical implementation aspects and industry-wide suggestions.
🧩 5. Next Steps & Timeline
- Draft published: SECP has officially issued the proposed rule amendments and launched the consultation phase .
- Feedback window opens: Comments are expected shortly—watch the SECP website or official gazette for the submission deadline.
- Consultations & review: SECP reviews responses, may host discussions or workshops.
- Final notification: Post-deliberation, the amended rules will be formally notified and come into effect.
🌐 6. Context & Broader VPS Reforms
These reminders are part of a broader transformation to modernize VPS in Pakistan:
- Employers (public & private) can now set up fully funded defined-contribution pension schemes, similar to 401(k) plans .
- A minimum asset manager rating of AM2 ensures high-quality fund administration .
- These changes aim to make VPS more inclusive, efficient, and aligned with international best practices .
✅ Final Thoughts
The SECP’s invitation for public comments is a valuable opportunity to shape pension policy that affects millions of retirees. By encouraging transparency and standardizing participant communications, the regulator is fostering a safer and more professional retirement landscape in Pakistan.
If you’re an employer, adviser, or VPS participant, now’s your chance to help craft the system’s future—and ensure that retirements are handled with clarity, dignity, and security.
