The Securities and Exchange Commission of Pakistan (SECP) has formed a Pension and Annuity Working Group (PAWG) as it gears up efforts to develop the country's private pension and annuity market.
The Group, comprising representatives from the SECP, asset management companies, life insurance companies and the actuarial profession of Pakistan, is tasked with preparing a roadmap to develop the private pension and annuity market, according to local media reports.
A developed pension market will help to deepen the market for long-term capital instruments, while the annuity market has been a missing link between the voluntary pension and insurance sector of Pakistan.
The Voluntary Pension Scheme (VPS) framework that was introduced in 2005, still has a very low uptake from the industry. Furthermore, since the life insurance sector has not been engaged in the distribution of VPS products so far, the life-contingent annuity market is almost non-existent in Pakistan. This indicates a huge potential for the VPS market.