AM 1 (VIS)
HBL Pension Funds
Presentation
October 2024
Table of Contents
AM 1 (VIS)
Introduction 3 Salient Features 11
Why Pension Funds? 4 Tax Credit 12
Eligibility 5 Illustration 15
Governing Law 6 Insurance Coverage 16
Fund Structure 7 Taxation 17
Contributions 8 PEF Journey 18
Type of Allocations 9 Target Market 23
or internal distribution only 2
Introduction
AM 1 (VIS)
HBL’s Pension Schemes or Funds (PEF) are Voluntary Pension Schemes (VPS) for individuals which
provide a reliable source of financial security in the form of savings and regular income stream after
retirement.
PEFs are managed by qualified and highly professional HBL AMC’s Fund Managers.
HBL AMC offers both Conventional and Shariah-compliant Pension Fund solutions for its customers
HBL Pension Fund
HBL Islamic Pension Fund
or internal distribution only 3
Why Pension Funds?
AM 1 (VIS)
Creates a pool of savings to earn from after retirement
Earn tax credit of up to 20% of your tax liability
or internal distribution only 4
Eligibility
AM 1 (VIS)
Pakistani Nationals, over the age of 18 years, who hold a valid National Tax Number (NTN) or Computerized
National Identity Card (CNIC)
Such individuals may include:
■ Salaried individuals
■ Self-employed individuals (Sole-proprietors / Professionals)
Non-resident Pakistanis holding a National Identity Card for Overseas Pakistanis (NICOP)
All Employers who wish to provide a pension system for their employees’ welfare and are unable to do so
currently. Such employers may include Corporates, SMEs or any Entrepreneur/ business-men who wish to
provide this benefit to their employees
Recognized Provident Funds that have the provision allowing them to transfer these funds to a professionally
managed Private Pension Fund Manager
or internal distribution only 5
Governing Law
AM 1 (VIS)
Voluntary Pension System Rules, 2005
Income Tax Ordinance, 2001
NBFC & NE Regulations, 2008
Companies Act, 2017
or internal distribution only 6
Fund Structure
AM 1 (VIS)
HBL Islamic Pension
HBL Pension Fund
Fund
comprises of 3 sub-
comprises of 3 sub-
funds
funds
• Aims to provide regular income along with capital
Low Risk preservation. Low Risk
• The MM sub-fund and Islamic MM sub-fund shall invest
Money Money
primarily in short-term mm securities with the maximum
Market average maturity of 90 days / 1 year respectively. Market
• Time to maturity of any asset in the portfolio of the mm
sub-funds shall not exceed six (6) months;
Medium Risk Medium Risk
• Aims to provide income along with capital preservation.
• The Debt sub-fund and Islamic Debt sub-fund shall
Debt invest primarily in tradable debt securities with a Debt
maximum weighted average maturity of five (5) years.
High Risk High Risk
• Aims to achieve long term capital growth.
• The Equity sub-funds shall invest primarily in equity
Equity securities, with a minimum investment of 90% of its Net Equity
Asset Value (NAV) in listed shares.
or internal distribution only 7
Contributions
AM 1 (VIS)
Minimum Investment Contribution Frequency Investment Limit
20%
1000 Rs
Initial investment from PKR Monthly / Quarterly / Half Upto 20% of annual taxable
1,000/- followed by minimum Yearly income
contributions from PKR1,000/- / Annually or Lump Sum to be invested to maximise tax
credit
or internal distribution only 8
Type of Allocations
AM 1 (VIS)
Money
Equity Debt
Market
Sub-fund Sub-fund
Sub-fund
0 High Min Min
Nil
1 Volatilit 65% 20%
y
0 Mediu Min Min Min
2 m 35% 40% 10%
Volatilit
Low
y Min Min Min
03
Volatilit 10% 60% 15%
y
Lower Min Min
04 Nil
40%
Volatilit 40%
y
Lifecycl
05 Next Slide
e
Volatilit
Customiz
y
06 0 - 100% 0 - 100% 0 - 100%
ed
Volatility
or internal distribution only 9
Life Cycle Allocation
AM 1 (VIS)
Risk Reward Spectrum
High Moderat
Low Lower
e
18 – 30 Years 31 – 40 Years 41 – 50 Years 51 – 60 Years 61 Years +
Equity Equity Equity Equity Equity
Sub Fund Sub Fund Sub Fund Sub Fund Sub Fund
75% 70% 60% 50% NIL
Debt Debt Debt Debt Debt
Sub Fund Sub Fund Sub Fund Sub Fund Sub Fund
20% 25% 30% 30% 50%
Money Money Money Money Money
Market Sub Market Sub Market Sub Market Sub Market Sub
Fund Fund Fund Fund Fund
5% 5% 10% 20% 50%
Starting with a higher equity investment allocation for an individual aged 18 years, the equity
Life Cycle Allocation allocation is gradually reduced and transferred to Debt and Money Market Funds as an individual
reaches the age 60 years.
or internal distribution only 10
Salient Features
AM 1 (VIS)
Tax Credit Retirement Age At Retirement Benefit Insurance
60 – 70
Reduce your tax Retirement age between 60 & Receive 50% of balance at Death and
liability by upto 70 years or 25 years after retirement (tax free) + regular accidental
20% initial contribution, whichever pension payments after coverage from NJI
is earlier retirement, subject to applicable
Pledge Portability Death & Disability
taxes M Fee/FE Load
Savings go to Nominees, who M Fee FEL
Option to pledge PEF Can easily transfer from one
units pension fund manager to then have the same options PF 0.9% to
against employer loan another that were available to the 1.00% Up to
(at zero cost) deceased 3.00
Islamic 0.55% to %
or internal distribution only PF 1.00% 11
Tax Credit – Reduce tax liability by
upto 20% AM 1 (VIS)
or internal distribution only 12
Tax Credit
AM 1 (VIS)
Individuals (Employed or Businessman)
Please note that now tax-credit options for individuals (Salaried & Businessmen, alike) are limited
and one should take benefit of any option that is available to enhance ones take-home income.
Following are the important points worth noting:
1. For tax credit purposes you can invest maximum upto 20% of your annual taxable income.
For example, if Annual Taxable Income (ATI) is Rs. 12,000,000 you can invest maximum
Rs. 2,400,000 (20% of the annual taxable income).
2. You can get tax credit depending upon your classification (either salaried or self-employed).
3. For example, if you classify yourself as salaried (for tax purposes) with ATI at Rs. 12,000,000
you can avail annual tax credit of Rs. 762,300 (Rs. 63,525.00 monthly).
4. Your benefit on investing in our pension fund = Fund return + Tax bracket. For example,
if the fund is expected to generate a 18% return and your tax bracket is 31.8% (assuming
salaried classification & Rs 12 mn ATI), your expected benefit = 18% + 31.8% = 49.8%.
or internal distribution only 13
Tax Credit
AM 1 (VIS)
Individuals (Employed or Businessman)
5. Contribution to the pension fund is not mandatory, however, in order to avail tax credit in
any tax year, you have to make a contribution in that tax year.
6. The aim is to remain invested till the age of retirement (retirement age can be from 60 years
till 70 years or 25 years from the date of first contribution, whichever is earlier).
7. You can withdraw your funds in our pension funds before retirement, however, that would
entail a tax charge @ last 3 years average tax rate on the whole withdrawal amount.
8. At retirement, you can withdraw 50% of the total amount, tax free. The remaining 50% is
converted into a monthly-installment plan the tenure of which is dependent on the investor’s
choice.
or internal distribution only 14
Illustration
AM 1 (VIS)
Individual aged 55 earning Rs 500,000 per
month
Assumptions Year 1 Year 2 Year 3 Year 4 Year 5
1. Salary growth rate @ 15% Monthly Salary 500,000 575,000 661,250 760,438 874,503
Salary Growth Rate 15.0% 15.0% 15.0% 15.0%
2. Tax Slabs remain the same
Annual Taxable Income (ATI) (Monthly Salary x 12) P 6,000,000 6,900,000 7,935,000 9,125,250 10,494,038
3. Retirement age = 60 Tax (based on current tax slabs @FY2024-25) Q 1,365,000 1,680,000 2,042,250 2,458,838 2,937,913
Tax Surcharge R 0 0 0 0 293,791
(Therefore, investment horizon Total Tax Amount S=Q+R 1,365,000 1,680,000 2,042,250 2,458,838 3,231,704
in PEF is 5 yrs) Tax Rate T=S/P 22.75% 24.35% 25.74% 26.95% 30.80%
4. Return assumed at an average
Contributions Year 1 Year 2 Year 3 Year 4 Year 5
rate of 15% till retirement
1st Contribution (20% of ATI - Year 1) 1,200,000 1,380,000 1,587,000 1,825,050 2,098,808
5. ATI = Rs.6,000,000 | 2nd Contribution (20% of ATI - Year 2) 1,380,000 1,587,000 1,825,050 2,098,808
3rd Contribution (20% of ATI - Year 3) 1,587,000 1,825,050 2,098,808
Permissible investment limit =
4th Contribution (20% of ATI - Year 4) 1,825,050 2,098,808
Rs.1,200,000 | Tax credit = 5th Contribution (20% of ATI - Year 5) 2,098,808
Contributions profit rate @15% Pool at Retirement (A) 10,494,038
273,000
Tax Credit 273,000 336,000 408,450 491,768 646,341
Total Tax Credit (B) 2,155,558
Total Benefit Realized = A + B 12,649,596
Investment Made = Sum of Annual Contributions 8,090,858
At Retirement - 50% of Pool can be withdrawn tax free 5,247,019
or internal distribution only 15
Insurance Coverage
AM 1 (VIS)
Objective:
HBL AMC in collaboration with Jubilee Life Insurance Company will provide death and accidental coverage to those clients who
have invested in Conventional and Shariah Compliant Pension Funds/Schemes i.e. HBL Pension Fund (HBL-PF) and HBL Islamic
Pension Fund (HBL-IPF).
Eligibility:
All investors of HBL Pension Fund and HBL Islamic Pension Fund residing in Pakistan, between 18-60 years of age and have the
balance of PKR 100,000/- or above.
Insurance Coverage:
In case of Natural Death Sum In case of Accidental Death Sum
Balance Amount
Assured Assured
Below PKR 100,000 None None
At least PKR 100,000 but less than PKR
PKR 150,000 PKR 1,000,000
200,000
At least PKR 200,000 but less than PKR
PKR 300,000 PKR 1,500,000
400,000
At least PKR 400,000 but less than PKR
PKR 500,000 PKR 2,000,000
600,000
At least PKR 600,000 but less than PKR
PKR 750,000 PKR 3,000,000
800,000
At least
Sum PKR
insured shall800,000 but
be subject to aless than ofPKR
Maximum PKR
1,500,000/-
PKR 1,000,000 PKR 4,000,000
1,000,000
or internal
At least PKRdistribution
1,000,000 or more only PKR 1,500,000 PKR 5,000,000 16
Taxation
AM 1 (VIS)
Stage Action Taxation
Before
Withdrawal
Retirement
Withdrawal in excess of Tax @ last 3
At Retirement
50% of balance years
avg. tax rate
Monthly payments
After Retirement At end of tenure
withdrawal
or internal distribution only 17
PEF Journey – for Salaried
Individuals AM 1 (VIS)
Before At After
Retirement Retirement Retirement
Contributions
Salaried R
Individuals Rs
s
Receive 50% of
Monthly / Quarterly 50% balance (tax free) 50% Balance 50% converted
/ Half Yearly / *MIPMIP*
to payments
Tax @ last 3 years avg. tax
Annually or Remaining 50% to
Lump Sum before 50% buy Monthly Income
rate
Tenure – At Clients Discretion
June 30
Plan (MIP) subject to
Allocation in 2 sub-funds
Earn Return applicable taxes
Withdrawal of Low Risk Medium Risk
Availing
Tax Get Tax Credit* balance in excess Money
Credit of 50% * Debt
*Tax credit for a tax year is Market
Inform your HR *Tax @ last 3 years avg.
dependent upon paying the
dept tax rate
contribution for that year At end of Tenure:
Submit your
statement to HR Buy another MIP or
HR will adjust
dept
Withdrawal* Withdraw the total
tax *Tax @ last 3 years avg. tax
rate
amount* (*Tax @ last 3 years
on monthly
avg. tax rate)
basis
or internal distribution only 18
PEF Journey – for Salaried
Individuals AM 1 (VIS)
PEF Contributions through Employers
For contributions on behalf of employees, employers can issue single payment and provide list of
employees along with their entitlement amounts to HBL-AMC for processing of Contributions.
Tax Credit and Early Withdrawal Tax penalty apply.
or internal distribution only 19
PEF Journey – for Self-employed
Individuals AM 1 (VIS)
Before At After
Retirement Retirement Retirement
Contributions
Self-employed R
Individuals Rs
s
Receive 50% of
Monthly / Quarterly 50% balance (tax free) 50% Balance 50% converted
/ Half Yearly / *MIPMIP*
to payments
Tax @ last 3 years avg. tax
Annually or Remaining 50% to
Lump Sum before 50% buy Monthly Income
rate
Tenure – At Clients Discretion
June 30
Plan (MIP) subject to
Allocation in 2 sub-funds
Earn Return applicable taxes
Withdrawal of Low Risk Medium Risk
Availing
Tax Get Tax Credit* balance in excess Money
Credit of 50% * Debt
Submit your *Tax credit for a tax year is Market
*Tax @ last 3 years avg.
statement along dependent upon paying the
tax rate
with other docs contribution for that year At end of Tenure:
at the time of Buy another MIP or
tax filing Withdrawal* Withdraw the total amount*
Submit tax
*Tax @ last 3 years avg. tax (*Tax @ last 3 years avg. tax rate)
challan with
rate
adjusted tax
or internal distribution only 20
PEF Journey – for Provident Funds
AM 1 (VIS)
Before At
Retirement Retirement
Contributions
Rs
HBL
Transferred to Monthly / Quarterly
Pension
Pension Fund / Half Yearly /
Fund Annually or
Lump Sum before
June 30 Receive 100% of
100% balance (tax free)
Earn Return
HBL
Islamic No Tax Credit
Pension
No Tax on
Fund Withdrawal
or internal distribution only 21
PEF Journey – for Provident Funds
AM 1 (VIS)
Transfer of PF to PEF
1. Provisions under Income Tax Manual Part II: Income Tax Rules 2002
2. Transfer of Approved Provident Fund Balance into a PEF account are ‘Permitted Withdrawals’
3. Approved Provident Fund balances can be transferred to a PEF Account tax free
4. Any transfers of balance from a Approved Provident Fund to a PEF will not be eligible for tax credit
5. Once funds have been transferred from Approved Provident Fund to PEF it can be withdrawn at any
time for any reason
6. Hence you can transfer your balance from an Approved Provident Fund to a more lucrative PEF
Account
or internal distribution only 22
Target Market
AM 1 (VIS)
Individuals (Employed or Businessman)
1. Age 55+
2. High Salaried / Earning having a high level of disposable income
3. Benefit = Fund Return + Tax Credit
Company Provident Funds
1. Looking for professional management of their PFs
2. Avoid hassle of managing the PF themselves
3. Want employee-based tailor made investment solutions
4. Tax-efficient returns for their employees
or internal distribution only 23
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AM 1 (VIS)
Thank You
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AM 1 (VIS)
Disclaimer
“All investments in pension funds are subject to market risks. Past performance is not necessarily
indicative of future results. Please read the Offering Document to understand the investment
policies, the risks involved & special features. For Funds’ categories, returns (including any unusual
performance), ratings and other information, please read latest Fund Manager Report at
https://hblasset.com/downloadcategories/fund-manager-report/ on our website.
HBL Bank is not responsible for the liabilities/obligations of HBL Asset Management Limited or any
investment scheme managed by it”
