Voluntary Pension System –Employee Retention Tool
In view of war for talent, the employers today have to more creative and responsive in the design and delivery of employee benefits plan. Employers, who continue to provide the traditional benefits, find it difficult to attract and retain talented workforce. Attractive yet affordable employee benefit plans have therefore become levers of sustainable workforce for smooth business continuity; thus enhancing productivity and ROI.
A retirement pension plan is an arrangement by the employer to provide its employees’ with an income when they are no longer having a regular income stream. Often retirement plans require both the employer and employee to contribute money into a fund so that employees receive benefits upon retirement. Currently, in Pakistan, both private and public sectors offer terminal benefits in the shape of provident funds and gratuity schemes. These schemes are also perceived by employees as retirement planning products. However, in their truest sense, provident funds and gratuity schemes are not retirement products. Fund withdrawal, job switching and loans against the schemes are a norm. Invariably, individuals are therefore left with depleted savings at the time of retirement.
With the introduction of regulatory framework for Voluntary Pension System (VPS) in Pakistan, the concept of pension for peaceful and secure retirement can be introduced to employers as an additional employee benefit. The Voluntary Pension Schemes are managed by Professional Pension Fund Managers who are responsible for ensuring that pension schemes operate effectively and sustainably. Their main function is to manage a pension fund – a large pool of money paid in by companies and individuals over many years to provide benefits in retirement. In Pakistan Pension Fund Managers are regulated by Securities and Exchange Commission of Pakistan. The objective of this seminar is to educate HR professional about Voluntary Pension Scheme, its structure and modalities, with focus on following:
- Employee Goals & Constraints.
- Retirement Planning
- Why pension are common retirement benefit choice.
- VPS structure, how it operates and its impact on employee retention.
- Asset allocation, Investment policy and process.
- VPS and Other Retirement Planning Products, a comparison.
- Risk profiling and Selection of sub funds.
- Investor Protection measures
- Tax Benefits of VPS