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Meezan Tahaffuz Pension Fund
Overview
Fund Statistics
Fund Type Voluntary Pension Scheme
Risk Level Minimal
Launch Date 28-Jun-07
Trustee Central Depository Company
Unit Types A
Auditors A.F. Ferguson
AMC Rating AM2 (High Quality)

Meezan Tahaffuz Pension Fund is the largest Shariah Compliant Voluntary Pension Scheme which is constituted under the VPS Rules, 2005. MTPF is a tax efficient long-term retirement savings scheme which helps you to systematically plan for a comfortable and respectable life after retirement.

In short, It’s the best tax efficient way for participants to save and invest for their retirement because as per Section 63 of the Income Tax Ordinance, you will be eligible for immediate Tax Credits for investments you make into MTPF. Tax Rebate can be claimed on up to 50% of one’s taxable income in a given financial year.

Fund highlights
  • Tax Efficient Pension Structure – MTPF is one of the most tax efficient pension plans available to investors domiciled in Pakistan.
  • Upfront Tax Benefits – Participation in the Meezan Tahaffuz Pension Fund entitles participants to receive following tax benefits:

o     Tax Credit1 on up to 20% of your taxable income. Additional catch-up incentives are provided to participants over 40 years, with a maximum tax credit on 50% of your taxable income for participants who are 55 years or older.

o      Contributions made in MTPF, plus the investment income is accumulated Tax-free till retirement.

o      Contributions made by employers on behalf of their employees are also exempt from tax. Whereas, in case of provident fund employer contribution beyond Rs.100,000 in a tax year is taxable now.

  • Fully Yours  This is an individualized pension account and is in the name of the participant. Whether the contribution comes from the employer or the participant, the benefit of the investment goes to the participant. The benefit is not dependant on the length of employment or any other condition of employment.
  • It’s Flexible, It’s Convenient – Choose to invest regularly through monthly, quarterly, half-yearly, yearly installments or contribute as and when you want, without any risk of penalties on missing payments.
  • It’s Portable – Your pension account will stay with you (remember it’s all yours!) even when you change jobs. Contributions can be resumed at any time either through the new employer, your personal contribution or both. Unlike conventional employee benefit funds which get disbanded when an employee changes job, your account in MTPF stays intact and continues with or without the new employer. Moreover, you can transfer your pension account to another Pension Fund manager of your choosing as and when you like, again without any charge or penalty.
  • Lump-sum Payment available on Retirement – On retirement, participants can withdraw up to 50% of the accumulated balance from their pension account, free of tax.
  • Premature Retirement – Death or disability, as defined in VPS Rules is deemed as retirement. This entitles the nominees to encash 50% of the accumulated balance, again free of tax.
  • Range of Investment Options – A variety of investment ‘allocation schemes’ to choose from and customized to suit specific needs and requirements of the participant.
  • Free Takaful Cover3 - Free of cost Takaful protection against Natural Death, Accidental Death, Permanent Total Disability and Accidental Medical Expenses.
   
Natural Death 50% of the average of last 2 months total invested balance of each individual subject to max of Rs. 5,000,000/-
Accidental Death 100% of the average of last 2 months total invested balance of each individual subject to max of Rs. 5,000,000/-
Permanent Total Disability 50% of the average of last 2 months total invested balance of each individual subject to max of Rs. 5,000,000/-
Medical coverage (Accident) 10% of the average of last 2 months total invested balance of each individual subject to max of Rs. 1,000,000/-
  • Choose Your Retirement Age – A participant can select a retirement age between 60 and 70; and also change it at a later date, if he or she wants due to change of circumstances.

How the Fund Works?

  • Contributions in MTPF are invested in various Shariah compliant instruments to earn Halal returns and build a corpus over the entire work life of the participant in accordance with the investment policy of MTPF.
  • You can invest money regularly or make lump-sum payments as and when you want.
  • You can choose from a wide range of investment options; the one that is most suitable for you will depend on your retirement goals, age and your appetite for risk. Your payments will be invested in the particular scheme that you choose with the aim of growing your individual pension account.

 

Allocation Schemes
The allocation schemes currently being offered are:

Allocation Scheme

(Maximum Allocation)

 

Equity Sub Fund

 

Debt Sub Fund

 

Money Market Sub Fund

High Volatility

80%

20%

-

Medium Volatility

50%

40%

10%

Low Volatility

25%

60%

15%

Lower Volatility

-

60%

40%

Life Cycle Plan

Meezan Life Cycle Plan (MLCP) is an allocation scheme allowing participants to allocate their contributions according to a planned asset allocation table as per their age.

 

 

The Participants can change their selected Allocation Scheme on the anniversary of their initial investment.
Guidelines for choosing Allocation Scheme
Each allocation scheme offers different risks and returns to the investor. The allocation schemes offer varying exposure of Equity, Debt, and Money Market instruments to the investor. Following are the risk and return measures for different allocation schemes available to the investor:
Allocation Scheme Equity Sub Fund Debt Sub Fund Money Market Sub Fund
Returns Highest Moderate Lowest
Inflation Risk Lowest High Highest
Volatility Highest Moderate Lowest
 
Benefits at Retirement
  • When you reach the retirement age, you can withdraw up to 50% of the accumulated balance (total investment plus returns earned over the period) for your immediate liquidity needs.
  •  This lump-sum payment is provided tax-free to participants. You can utilize this amount for any immediate need or re-invest it in any other investment vehicle of choice.
  •  The balance amount (accumulated amount less lump-sum payment) can be used to invest in an Approved Income Payment Plan from a Pension Fund Manager or to purchase a annuity from a life insurance company in order to provide a post-retirement monthly income.
  •  Participants may, at any time before retirement, redeem all or part of the accumulated amount from their Pension Account. However, such redemptions will be subject to deduction of Income tax at participant’s average tax rate for the last three consecutive years.
  •  MTPF is the best way to save and invest for your post-retirement needs and it has  the potential to deliver superior returns with the added advantage of providing immense Tax Benefits* which significantly boost the yield on your investment.

*as per prevailing tax laws

 

Fund Performance Highlights
July to June
Annual Returns FY08* FY09 FY10 FY11 FY12 (up to 25th March)
MTPF - Equity Sub Fund 3.10% -25.80% 31.50% 36.00% 21.06%
MTPF - Debt Sub Fund* 8.30% 10.20% 8.50% 10.90% 9.26%
MTPF - Money Market Sub Fund* 7.70% 11.10% 8.50% 10.70% 11.09%

*Annualized

 

Scheme Features
Scheme Features
Scheme Name Meezan Tahaffuz Pension Fund
Nature of scheme Open-end Shariah Voluntary Pension Scheme
Date of Inception June 28, 2007
Objective of the scheme To provide participants a regular Halal income at the
time of retirement and at an age when one’s capacity
to work is diminished, so that one is not dependant
on other members of the society.
Asset Allocation Five Asset Allocation Schemes:
1. High Volatility
2. Medium Volatility
3. Low Volatility
4. Lower Volatility
5. Life Cycle Plan
Risk Level Low to High(depends upon asset allocation chosen)
Minimum Investment Amount Rs.1,000
Lock-in Period No lock-in, however a commitment to remain invested
till retirement is the essence of the scheme
 
Entry Load 3%
Exit Load NIL
Tax Benefits EET Structure
Tax Exempt Contributions
Tax Exempt earnings throughout the Investment
Period Tax on 50% of accumulated amount,Tax
free withdrawal of 50% balance on retirement

 

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