Al Meezan Investment Management Ltd. > Mutual Funds > Pension Fund

All investments in Meezan Tahaffuz Pension Fund are subject to market risks. The value of such investments may depreciate as well as appreciate, subject to market fluctuations and risks inherent in all such investments. Participants should read the Offering Document carefully to understand the investment policies, risks and tax implication and should consult their, legal, financial or tax adviser before making any investment decision. Withdrawals from the Pension Fund before the retirement age are subject to tax under the provisions of the Income Tax Ordinance, 2001.

Introduction

Fund Statistics
Fund Type	Open End
Risk Level	Minimal
Launch Date	28-Jun-07
Trustee	Central Depository Company
Unit Types	A
Auditors	A.F. Ferguson
AMC Rating	AM2 (High Quality)

Financial security and comfort are required by every person, specially after retirement when avenues of regular income are exhausted and it becomes extremely difficult to maintain one’s standard of living. In order to fulfill this need, Al Meezan Investments presents a Shariah Compliant Pension Fund titled Meezan Tahaffuz Pension Fund (MTPF), which is a saving mechanism where an individual saves from his/her income during work life in order to retain financial security and comfort in terms of regular income stream after retirement.

The contributions made by a Participant in MTPF over his work life will be invested by Al Meezan Investments, the Pension Fund Manager. These investments will be made in accordance with the investment policy of MTPF, as fully disclosed in its Offering Document. Upon retirement of the Participant, his / her accumulated sum comprising of his investment and the returns earned over the years will be redeemed from MTPF to provide participant s ome cash for his immediate requirement and the balance amount will be used to purchase an ‘Annuity’ or ‘Income Payment Plan, so that he can get regular post retirement income. Thus, MTPF provides investors a chance to save for a regular and Halal income stream after retirement.

The MTPF initially comprises of three sub funds - Equity sub-fund, Debt sub-fund and Money Market sub-fund. Participants will be offered various investment allocation schemes offering levels of investment in the three sub funds, depending on their investment horizon, return requirements, risk tolerance and any unique circumstances. The contributions from Participants will be invested in various instruments belonging to different asset classes to get full benefits of risk minimization through diversification.

The different Allocation Schemes will be offered to participants based on their risk-return requirements. The allocation schemes currently being offered are:

Allocation Scheme	Equity Sub Fund	Debt Sub Fund	Money Market Sub Fund
Aggressive	Min 65%	Min 20%	Nil
Balanced	Min 35%	Min 40%	Min 10%
Conservative	Min 10%	Min 60%	Min 15%
Very Conservative	Nil	Min 40%	Min 40%

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

Salient features of MTPF?
MTPF provides the following benefits to the Participants:

Dual Tax Benefits:

The investments in MTPF offer dual tax benefits as contributions are available for tax credit and return on the same are also tax free. The following is an example of the tax credits which the participant shall receive.

For Salaried Individuals
Taxable Income (Rs. p.a.)	Contribution (Rs. p.a.)	Tax Credit (Rs. p.a.)
300,000	60,000	450
500,000	100,000	3,500
800,000	160,000	12,000
1,200,000	240,000	26,400
2,500,000	500,000	80,000
8,400,001	500,000	100,000


For Non Salaried Individuals
Taxable Income (Rs. p.a.)	Contribution (Rs. p.a.)	Tax Credit (Rs. p.a.)
300,000	60,000	3,000
500,000	100,000	10,000
800,000	160,000	24,000
1,200,000	240,000	50,400
1,500,000	300,000	75,000
2,500,000	500,000	125,000

For detailed understanding participants are advised to read clause 12.1 of the offering document. An investor of MTPF gets dual tax benefit. - Tax rebate on contribution amount and Tax exemption on returns earned on those contributions. Thus, an individual will have more money to re-invest for getting much greater capital appreciation over a long period of time.

Professional Fund Management

The name of Al Meezan Investments is associated with high quality Fund Management which is also in accordance with the guidelines of Shariah. MTPF not only aims at long-term capital preservation but also to earn greater returns on your contributions through prudent fund management

Contribution amount and mode

The initial Contribution of Rs.1, 000 is required for opening of account and subsequent contributions can be as low as Rs.1, 000. The first step in determining the amount of contributions is that you decide how much money you will require after retirement. In addition, you will have to work out how much can you set aside on a monthly basis to come with a lump sum amount large enough to create an annuity, which provides a desirable monthly income after retirement. Contributions can be made at the convenience of the participant i.e., monthly, quarterly, half yearly, annually or by lump sum payment.

Retirement Age:

The participant can select any age between 60 and 70 years as his retirement age. However, he should intimate the Pension Fund Manager at least 30 days before retirement. The retirement age once selected, can be changed at a later date by the participant.

Benefits on Retirement:

All accumulated funds at the date of retirement of the Participant will be available to him/her in the following manner:

1	The participant can withdraw Tax-Free up to fifty percent of the accumulated amount in his individual Pension Account.
2	The participant can withdraw 100% of the amount in his Individual Pension Account subject to (deduction of withholding tax under the) provisions of Income Tax Ordinance, 2001
3	He can enter into an agreement with the Pension Fund Manager to withdraw from the remaining amount, monthly installments till the age of seventy-five years or earlier, according to an income payment plan, approved by the SECP. At the expiry of the income payment plan according to clause (b) above, the Participant shall use the outstanding balance in his individual pension account to purchase an annuity from a Life Insurance Company of his choice. OR
4	He can use the remaining amount to purchase an annuity (single life, joint or survivor life, level, with or without guarantee period, increasing, investment-linked and retail price index linked or with any additional features from a Life Insurance Company of his/her choice

Withdrawal of funds before retirement:

A participant at any time before retirement shall have complete freedom to redeem the total or part of his/her accumulated amount (contributions and profits earned thereon) subject to payment of tax @ his/her average income tax rate of the preceding three years.

In case of death before retirement:

In case of death of a participant before the retirement age, all his investment will be redeemed and same will be available to the nominated survivors with the following options:

1	Withdraw his share of the amount subject to the conditions laid down in the Income Tax Ordinance 2001 (i.e. on payment of Tax @ three years average tax rate)
2	Transfer his/her share of the amount into his existing or new individual pension account to be opened with the Pension Fund manager,
3	Use his/her share of the amount to purchase an annuity on his life from a Life Insurance Company, only-if his/her age is fifty- five years or more; or
4	Use his/her share of the amount to purchase a deferred annuity on his life from a Life Insurance Company to commence at age fifty five years or later

Portability

The participant has the option to change his/her Pension Fund Manager at the anniversary of his/her account opening. In order to change the Pension Fund Manager, he/she needs to inform the Pension Fund Manager 30 days in advance.

All investments in MTPF are screened for Shariah Compliance based on the criteria approved by the Meezan Bank’s Shariah Supervisory Board, which is headed by eminent Shariah scholar Justice (Retd.) Mufti Muhammad Taqi Usmani. With such a strong and reputed Islamic foundation, Al Meezan Investments uses its fund management expertise to satisfy your investment needs for Halal and Riba-Free returns.