Published on: Mar 3, 2016
Transcripts - NAFA_Pension_Fund_Brochure_English
NAFA Pension Schemes
NAFA Pension Fund (NPF)
NAFA Islamic Pension Fund (NIPF)
“You know you’re getting old when the candles cost more than the cake”
- Bob Hope
Individualized Asset Allocation
Maintain Life Style during Retirement
“Individuals aged 55 years and above can avail tax credit on contributions
up to 50% of last year’s taxable income.”
Why Pension Fund?
At some stage in your life you stop working
while you still need enough earnings to
maintain your lifestyle. This stage is called
retirement. In addition to this, during this
time you would ideally like to spend your
time relaxing with family, traveling, and
pursuing other interests which you put aside
earlier owing to your busy work schedule. To
finance all these activities you require savings
that generate a regular income stream. A
Pension Fund (Voluntary Pension Scheme –
VPS) will help you accumulate the savings to
achieve the financial security you desire
We recommend that you start saving and accumulating your pension amount now.
The earlier you start saving, the more you will earn with NAFA Pension Funds till the
time you retire. An illustration of how systematic investing for a longer duration
increases the value of your savings:
Start Saving Now…….Why?
Start saving Rs. 5,000 / month
at the age of 30
Start saving Rs. 15,000 / month
at the age of 40
Start saving Rs. 50,000 / month
at the age of 50
Beneﬁts of starting Systematic Regular Investmentsat an Early Age
14% 14% 14%12% 12% 12%10% 10% 10%
“Assuming Retirement Age of 60”
NBP Fullerton Asset Management Limited (NAFA) is a subsidiary of National Bank
of Pakistan (NBP) with Fullerton Fund Management, Singapore as its joint venture
partner. NAFA is among the leading Asset Management Companies in the country
and is rated ‘AM2‘ by PACRA based on its proficient & experienced management
team, sound quality of systems & processes, sponsors’ strength, diverse product
slate and superior performance of the funds under management. NAFA has several
years of track record of successfully managing mutual funds under various asset
categories and discretionary portfolios.
About your Pension Fund Manager:
The above projections do not represent returns of pension funds but are only used
to illustrate the benefit of starting to invest early.
NAFA Pension Fund (NPF) and NAFA Islamic
Pension Fund (NIPF) have been established
under the Voluntary Pension Systems Rules
2005. These pension funds have a structure
where the contribution received from the
Participants is invested in the underlying
sub-funds namely, equity, debt and money
market based on the allocation scheme
selected by the Participant according to his / her
risk/return appetite. The Sub-Funds of NAFA
Islamic Pension Fund invest only in authorized
Shariah Compliant Avenues approved by the
Shariah Advisor. NAFA Pension Funds offer
flexibility to the Participants to choose the
timings, amounts and how to invest their
savings in tax efficient manner.
1. Personalized Investing as per the Risk Appetite of the Participant
NAFA Pension Funds offer the Participants to choose the allocation schemes to invest
in money market, debt and equities according to their investment horizon and risk
and return objective.
2. Old Age Living Expenses
Savings for old age to meet living expenses including medical bills.
3. Maintain Life Style
Savings to least compromise on the life style enjoyed during employment years.
4. Tax Credit
The Participant will be entitled to tax credit on his / her contribution subject to applica-
ble Tax laws.
5. Tax Free Growth in Investment
The Contributions paid by the Participants and/ or their employers (if any), plus the
investment income, are accumulated tax free in the Sub-Funds until the Participant retires.
Key Facts of NAFA Pension Funds:
Benefits of NAFA Pension Funds:
Fund Type Open-end Voluntary Pension Scheme (VPS)
Fund Inception July 2, 2013
Minimum Investment Rs. 1,000/- (Rs.10,000/- at the time of account opening)
Underlying Funds Equity sub-fund, Debt sub-fund and Money Market sub-fund
− Speciﬁed allocation (high, medium, low and lower volatility)
− Lifecycle allocation (allocation changes based on age)
No lock-in period
(subject to applicable tax on pre-retirement withdrawal as per law)
Sale Load 3.0% Front-end Load
- Debt Sub Fund - 1.25% of annual net assets
- Money Market Sub Fund - 1.00% of annual net assets
- Equity Sub Fund - 1.50% of annual net assets
Trustee Central Depository Company (CDC)
Auditors M. Yousuf Adil Saleem & Co. Chartered Accountants,
About your Pension Fund:
6. Retirement Planning
Participant can choose his/her retirement age that can be any age between sixty to
seventy years or twenty five (25) years since the age of first contribution to a pension
fund, whichever is earlier.
7. Option to Withdraw Lump Sum Amount Free of Tax at Retirement
A Participant can choose to receive a lump sum payment (up to 50% of his/her
accumulated balance) when he/she retires, free of tax.
8. Option to Purchase Annuity / Monthly Plan
The remaining amount from point 7 above will either be used to purchase an
Approved Annuity Plan from a Life Insurance Company or purchase an Approved
Income Payment Plan offered by a Pension Fund Manager, to withdraw via regular
monthly installments for up to 15 years following the date of retirement.
9. Option to Withdraw Funds in Case of Early Retirement Due to Disability
In case of unfortunate early retirement due to disability and inability of the Partici-
pant to continue work, Participant can avail the same benefits as are available on the
date of retirement.
10. Pension Fund Continuity
The account stays in case of change in jobs by the Participants.
11. Pension Fund Portability
Participant is entitled to transfer part or entire Pension Account from one
Pension Fund to another once in a FinancialYear with 21 days prior notice without any
tax implication or extra charge.
12. Professional Management
NAFA Pension Funds are managed by professional fund managers of NBP
Fullerton Asset Management Limited (NAFA) who have the market knowledge and
successful experience to manage such funds.
13. Accidental Free Insurance Coverage
NAFA as the Pension Fund Manager provides accidental death and disability
coverage up to age 65 for an amount up to Rs 1 Million (only NAFA Pension Fund).
Participants shall not be required to undergo medical examination for insurance
coverage. (subject to minimum balance of Rs 100,000/-)
b)Life Cycle Allocation
The participant will have the option to choose from five specified allocation schemes
as below or a lifecycle allocation scheme.
a) The participant will have the option to choose
Life Cycle Allocation
Starting with a higher equity investment allocation for an individual
aged 18 years, the equity allocation is gradually reduced and
transferred to Debt and Money Market Funds as an individual reaches
the age of 60 years. Equity allocation shall be gradually reduced year
wise from 50% to 0% between the age of 51 and 60 years
Allocation Scheme Equty Sub-Fund Debt Sub-Fund
0%-100% 0%-100% 0%-100%
To be selected by the participant depending
on remaining working rears and risk performace
* Depending on remaining working years and risk preference.
Long term horizon
Medium term horizon
Short to medium horizon
Investors nearing retirement age
Pakistani having a valid Computerized National Identity Card (CNIC) or
National Tax Number (NTN).
Non-resident Pakistani having a valid National Identity Card for Overseas
Employer on behalf of their employees
A member can transfer his balance from an approved Provident Fund to aVPSAccount.
Contributions made in NAFA Pension Funds during any one tax year (i.e. between
July 1 to June 30) shall be entitled to a tax credit under Section 63 of the Income Tax
The amount of tax credit allowed in any one tax year shall be calculated according
to the following formula: (A/B) x C Where:
A is the amount of tax assessed to the person for the tax year, before allowance of any
tax credit under this part;
B is the person’s taxable income for the tax year;
C is the lesser of:
The total contribution paid by the person in the year; or
Twenty percent of the eligible person's taxable income for the relevant tax year.
Provided that an eligible person joining the scheme at the age of forty-one years or
above, during the first ten years starting from July1, 2006, shall be allowed additional
contribution of 2% p.a. for each year of age exceeding forty years. Provided further
that the total contributions allowed to such person shall not exceed 50% of the total
taxable income of the preceding year.
For Salaried individuals, the investment in NAFA Pension Funds offers attractive tax
credit as shown in the following table:
Example of Tax Credit for Salaried Individuals:
Allowable per year
Pension Fund for
A B C = A X 20% D E = C X D
Contact your NAFA Financial Advisor or call our Toll Free number 0800-
20001 to set up an appointment at your convenient time.
Our Financial Advisor will help you assess your specific needs and risk
tolerance level, and will recommend the NPF/NIPF allocation scheme best
suited to your needs and objective.
Once satisfied with the recommended solution, you will be provided with
complete assistance on NPF/NIPF account opening procedure by our
Easy 3-step process to invest in NAFA Pension Funds (NPF & NIPF)
* The above working is based on 20% tax credit allowed, however, the benefit for age 41 and above increases
2% with each year of age with a cap of 50% as per current Income Tax laws.
For Self Empolyed individuals, the investment in NAFA Pension Funds offers
attractive tax credit as shown in the following table:
Example of Tax Credit for Self Empolyed Individuals
Disclaimer: All investments in pension funds are subject to market risks. The NAV of units may
go up or down based on market conditions. Past performance is not necessarily indicative of
future results. Please read the Offering Document to understand the investment policies, the
risks involved and tax implications.Withdrawals before the retirement age are subject to tax
under provisions of the Income Tax Ordinance 2001.
Allowable per year
Pension Fund for
A B C = A X 20% D E = C X D
750,000 35,000 150,000 4.67% 7,000
2,500,000 347,500 500,000 13.90% 69,500
4,000,000 722,500 800,000 18.06% 144,500
7,500,000 1,847,500 1,500,000 24.63% 369,500