The Securities and Exchange Commission of Pakistan (SECP) on Friday approved several new annuity products aimed at improving retirement income security and supporting the growth of Pakistan’s annuity market.
The newly approved offerings include life-contingent annuities, deferred annuities, annuities with guaranteed payments, and hybrid annuity structures that combine guaranteed payouts with lifetime income benefits.
“These products will help retirees convert their accumulated savings into a regular and predictable income stream after retirement, reducing financial uncertainty in later years,” the statement said.
The move follows consultations with stakeholders in the insurance industry and seeks to address a major gap in Pakistan’s retirement framework.
According to SECP, retirement savings products in the country have traditionally focused on building savings during a person’s working years, while limited mechanisms have existed to convert those funds into consistent post-retirement income.
The regulator noted that this shortfall has heightened financial risks for retirees, particularly amid increasing life expectancy and ongoing inflation.
SECP said the newly approved annuity options are intended to offer greater flexibility for retirement income planning.
“Life-contingent annuities provide payments for the lifetime of the annuitant, while deferred annuities begin payments after a specified deferment period. Annuities with guaranteed payments ensure regular income for a fixed period, and hybrid annuity structures combine guaranteed payments with lifetime income benefits,” it said.
These products will be offered by conventional life insurance companies as well as Window Takaful and full-fledged Takaful operators, making them available in both conventional and Shariah-compliant segments. More insurers are also expected to roll out similar products in the coming months.
SECP believes that introducing a wider range of annuity products will help strengthen Pakistan’s retirement system, improve financial protection for retirees, and contribute to the long-term development of the insurance sector.
