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Roshan Pension Plan (RPP) is a voluntary pension scheme run by a Pension Fund Manager who manages the voluntary contributions made by a participant, whether employed or not, or by an employer on his behalf, based on Voluntary Pension System Rules, 2005. It is a saving mechanism where an individual saves from his/her current income in order to retain financial security and comfort in terms of regular income after retirement.

RPP is a steady stream of income given to a person (usually after retirement). RPP is a saving, or a contribution, which is collected during the working life of the RDA holder and invested for return in future. After the opted retirement date, the account holder is entitled to a steady monthly income from a fund built-up from the earlier savings.

A Participant is an individual (NRVA holder) who has contributed or on behalf of whom contributions are made into the pension scheme.

Pension Fund Manager means an asset management company (AMC) or a life insurance company duly authorized by the Securities and Exchange Commission of Pakistan (SECP) to efficaciously manage the contributions made by or on behalf of participants in pension fund and meet such other conditions as may be prescribed from time to time by the SECP.

All NRVA holders having a valid CNIC/NICOP/POC and a source of income are eligible to contribute in RPP.

Minimum age is 18 years and Maximum age is 70 years.

NRVA holder can open Pension Account with his/ her RDA Bank by accessing the relevant portal while visiting its official website.

Rs. 10,000/-.
In order to properly build a pension fund, one should have to first determine the amount required on a monthly basis after the time of retirement. In addition, one will have to work out how much will he/she need to set aside on a monthly basis to come with a lump sum amount large enough to create an annuity, which provides a desirable monthly income after retirement.

A fund’s Net Asset Value (NAV) represents the value per unit at a given point of time. The NAV is equal to the market worth of assets held in the portfolio of a Fund, minus liabilities, divided by the number of units currently issued to investors.
NAV Per Unit = (Current Market Value of all the Assets – Liabilities) / Total Number of Units Outstanding
The sales and redemption price of units might be different from the NAV if there is an element of “Sales Load / Front End Load” or “Back End Load”. The sale and redemption price is declared on a daily basis by the fund manager on its websites.

An investment allocation scheme, which provides an opportunity to create a personalized retirement fund through regular contributions, with allocations adjusted according to the age & risk taking capacity of the investor.
It provides following options to the participants to select a Pension Allocation scheme according to their requirements:

Without Gold Equity Sub Fund Debt Sub Fund Money Market Sub Fund
Medium Volatility 50% 40% 10%
Low Volatility 25% 60% 15%
Lower Volatility Nil 50% 50%

Yes, at any point of time during the year.

The AMC will invest the pension plan funds in different money market instruments and Shariah Compliant equity instruments, with the aim to maximize return of the RPP participants.

Sales Load fee under Roshan Pension Plan is 100% waived off.

There is no Backend Load under Roshan Pension Plan/ MTPF.

Management fee is charged up to 1.5 % per annum of the net assets value of the pension fund.

Rates of return under RPP are market driven, however, historical returns in various avenues of investment are considered for the purpose of illustrations. They can be referred from monthly Fund Manager Report (FMR) from the bank’s website.

The participant can contribute any time at his/ her own convenience.

Returns will not be distributed to the participant, it will be accumulated with the investment and after retirement participant can get the benefits. However, in case of early withdrawal of any amount it will be subject to deduction of applicable taxes.

The term of the allocation scheme would depend on the age of the investor, as the allocation scheme can mature any time between 60 and 70 years or the age which he/she will be after 25 years from the date of first contribution into a VPS; whichever comes first. However, the participant is free to redeem as and when desired, with returns up to the day of redemption and payment of tax thereupon (if applicable).

All accumulated funds at the date of retirement of the participant will be available to him/her with the following options, namely:

  • To withdraw Tax-Free up to fifty percent (50%) of the amount in his/ her individual pension account, as cash;
  • To enter into a Monthly Income Payment Plan (MIPP) till the age of 65 years or earlier, according to an income payment allocation scheme, approved by the SECP. Disbursement (redemption) of MIPP is subject to applicable Tax laws.
  • To use the remaining amount to purchase an annuity from a Life Insurance Company / Family Takaful company of his/her choice.

In case of death before retirement:

  • All his/ her investment will be available to the nominated survivors as per Succession Certificate issued by the Court or NADRA with the following options:
    • Withdraw his/her share of the amount subject to the conditions laid down in the Income Tax Ordinance 2001;
    • Transfer his/her share of the amount into his existing or new individual pension account to be opened with the Pension Fund manager,
    • Use his/her share of the amount to purchase an annuity on his/her life from a Life Insurance Company, only-if his/her age is fifty- five years or more; or
    • Use his/her share of the amount to purchase a deferred annuity on his/her life from a Life Insurance Company to commence at age fifty five years or later.

In case of disability before retirement:
  • The person will be treated as retired and will get all the benefits as on retirement.

The withdrawal of 50% at the time of Retirement age remains tax free, however, over and above amount shall be subject to payment of tax @ of participant’s average tax rate of the preceding three years.

Not necessarily. The entire amount can be shifted for Monthly Income Payment Plan (MIPP) or 50% tax free can be withdrawn.

A participant at any time before retirement shall be entitled to redeem the total or part of his/her accumulation subject to payment of tax @ of his/her average tax rate of the preceding three years.

The Participant will have the option to place the amount selected for MIPP purposes in one of the following allocation schemes for systematic redemption of units in order to get a periodic payment.

  • Medium Volatility (Minimum 35% Equity, Minimum 40% Debt, Minimum 10% Money Market)
  • Low Volatility (previously conservative) (Minimum 10% Equity, Minimum 60% Debt, Minimum 15% Money Market)
  • Lower Volatility (previously very conservative)
    • (0% Equity, Minimum 40% Debt, Minimum 40% Money Market)
    • Debt Sub: 100%
    • Money Market Sub Fund: 100%

 

Withdrawals can be made through any of these three options;

  • Systematic Withdrawal Option – Under this option the Participant shall instruct the AMC to pay a fixed amount at the end of each Period. This payment option will not be available to participants choosing Medium Volatility Option.
  • Actual Appreciation Payment plus Fixed Amount – Under this option the AMC shall calculate the amount a Participant receives based upon the actual appreciation of Participation Amount at the end of the Period plus a fixed amount. If investment depreciates during the Period, only fixed amount shall be paid to the Participant through his Participation Amount. Fixed amount shall be revisited annually to adjust for any depreciation in account balance.
  • Balance to remaining number of Months Methodology – The value of total remaining balance shall be divided into the remaining number of months in the selected period. This exercise shall be undertaken at the end of each year.

In case of death of the MIPP participant, the successor(s) can continue with the Plan after converting the funds under their name for remaining period. If withdrawn early the tax will be applied as per law.

Pension funds are similar to other open-end funds in terms of their returns. However, they are regulated under Voluntary Pension Scheme Rules, while Open end funds are regulated under NBFC regulations 2008. Tax Credit is available in VPS Investment as per Section 63 of ITO 2001, for individuals who also have some source of income in Pakistan.

Retirement age can be changed, on written request for maximum up to the age of 70 years.





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