Degree

Master of Business Administration Executive

Faculty / School

Faculty of Business Administration (FBA)

Year of Award

2016

Project Type

MBA Executive Research Project

Access Type

Restricted Access

Executive Summary

In welfare states, the retirement planning of citizens is a state's responsibility yet recent cut down in pension have led them think of where in the financial planning the setback laid. Chile was the first country to identify the bottleneck and reforms were introduced to convert pension from defined benefit and Pay as you Go scheme to fully funded, individualized capital account based on defined contribution plan States like Pakistan where we do not have any robust retirement plan, the issue becomes food for thought for individuals.

in the name of retirement planning, we only have EOBl, OSS, NSS and mutual funds mainly available for employed personnel. Mr. Naseem Beg along with Mr. Shaukat Aziz took initiative, worked with World Bank's consultants and structured a pension plan similar to the chile Model. For some political reasons the intended pension reforms weren't implemented rather the Chile model was transformed into voluntary pension mechanism termed as VPS. The SECP then regulated the product in 2005 and formally introduced VPS as Voluntary Pension Scheme Rules 2005. Despite the success of Chile pension model and growth in VPS since inception, the product is struggling and is in the introduction phase of product life cycle. The report thus aims to identify the bottlenecks and provide recommendations to replicate the success of Chile pension model.

The report is based on analysis and comparative study of Chilean pension model, he aws of retirement schemes in Pakistan namely EOBl and OSS, pension plans across the world World Bank reforms for pension and the OECD pension reports; the mam sources of secondary data for he report. To lntS the reasons for slow growth of VPS, three interviews were taken from the industry experts who were directly involved in the research and development of pension product "^'ch later was termed as VPS namely Ms. Mashmooma Majeed, CEO-MUFAP; Mr. Naseem Beg, Director-Anf Habib Lrporation and Mr. Habib Ur Rahman, CEO-AAML. To identify the financial literacy about retirement planning, reasons for invisibility and opinion from general public about the product, a dichotomous questionnaire was developed.

Pages

IV, 78

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