In the recent news, the State Bank of Pakistan (SBP) has enabled Non-Resident Pakistanis (NRP) to contribute to pension funds, authorized by the Securities and Exchange Commission of Pakistan (SECP) under Voluntary Pension Funds Rules 2005 (VPS Rules). “In order to improve the value proposition of NRVA and facilitate the NRPs, it has been decided to allow NRPs to contribute in pension funds, authorized by SECP through their Authorized Dealers” a circular issued by SBP said.
Funds Available in NRVA Can be Used for the Contribution to Pension Funds
Moreover, as per amendments, NRVA holders are allowed to contribute to pension funds, authorized in terms of Voluntary Pension Funds Rules 2005, under the management of Pension Fund Managers (PFMs) registered with SECP, through NRVA opened with an Authorized Dealer (AD) in Pakistan. As per procedure, funds available in NRVA can be used for contribution to pension funds and payment for such contribution may be debited from the account on the specific request of the NRVA holder for onward credit to the bank account of the trustee of the pension fund.
The PFM Will Provide NAV and Payment Copy to the AD
The Net Asset Value (NAV) allocated with respect to each contribution along with a copy of the payment instrument/ details will be provided by the PFM to the AD on the same day. PFM shall also send account statements to the AD within 24 hours of the realization of funds. Redemption proceeds may be credited to respective NRVA, received from the trustee of pension fund on account of redemption of units earlier contributed by participants through these accounts or bonus units issued thereon.
The details of the same will be shared by the Trustee of the pension fund/ PFM with the AD. The AD will ensure that all issuance and redemptions are taking place at the prevalent NAV announced publicly by the relevant PFM. The AD will maintain complete reconciliation of the amount transferred/ received to/ from the trustee of pension amount, units contributed/ redeemed by the participant there-against, and ensure the compliance of all related foreign exchange regulations.