KARACHI: The State Bank of Pakistan (SBP) has allowed non-resident Pakistanis (NRPs) to contribute to pension funds, licensed by the Securities and Exchange Commission of Pakistan (SECP) under the 2005 Rules on voluntary pension funds (VPS rules).
As a result, some changes have been made to the instructions for the NRP Rupee Value Account (NRVA) for the contribution of NRP approved pension fund units.
“In order to enhance NRVA’s value proposition and facilitate NRPs, it has been decided to allow NRPs to contribute to pension funds, authorized by SECP through their authorized dealers,” reads a circular issued by the SBP.
As a result, some changes in foreign exchange regulations have been made by the SBP.
Under the amendments, NRVA holders are permitted to contribute to pension funds, authorized under the Voluntary Pension Funds Rules 2005, under the direction of pension fund managers (PFMs) registered with the SECP, through NRVA opened from an Authorized Dealer (AD) in Pakistan. .
In accordance with the procedure, the funds available in the NRVA can be used for the contribution to the pension funds and the payment of this contribution can be debited from the account at the specific request of the holder of the NRVA for subsequent credit to the bank account of the administrator of the pension fund.
Foreign incorporated business entities: SBP introduces two distinct categories of forex accounts, PKR
The net asset value (NAV) attributed to each contribution together with a copy of the payment instrument/details will be provided by the GFP to the DA on the same day. GFP also sends account statements to the DA within 24 hours of realizing the funds.
In the event of a transfer of the NRVA holder’s individual pension account from one pension fund to another pension fund within the same GFP, the GFP will share the details of the transfer transaction (including all reported details for the transfer from one pension fund to another fund) for their MA file.
In the event of a transfer of the NRVA holder’s individual pension account from one GFP to another GFP, the GFP will share the details of the transfer transaction (including all reported details for the transfer from one GFP to another GFP) for AD registration.
Redemption proceeds may be credited to the respective NRVA, received from the trustee of the pension fund due to the redemption of units previously contributed by participants through these accounts or bonus units issued on them. Details on this will be shared by the pension fund/PFM trustee with the DA.
The DA will ensure that all issues and redemptions take place at the prevailing net asset value publicly announced by the relevant PFM.
The DA will maintain full reconciliation of the amount transferred/received to/from the pension fund administrator, units paid/redeemed by the participant against the participant, and ensure compliance with all related exchange regulations.
SBP has advised banks to bring the above instructions to the attention of all their principals for meticulous compliance.
Copyright Business Recorder, 2022