SECP approves new annuities to provide predictable retirement income

The Securities and Exchange Commission of Pakistan (SECP) on Friday approved a set of new annuity products aimed at improving post-retirement income security and expanding Pakistan’s annuity market.

The approved products include life-contingent annuities, deferred annuities, annuities with guaranteed payments, and hybrid structures combining guaranteed payouts with lifetime income benefits. They will be offered by conventional life insurers, Window Takaful operators, and full-fledged Takaful companies, ensuring availability in both conventional and Shariah-compliant segments. Additional insurers are expected to launch similar offerings in the coming months.

SECP noted that Pakistan’s retirement savings framework has traditionally focused on accumulating funds during working years, providing limited options for converting savings into regular post-retirement income. This gap has increased financial risks for retirees, especially amid rising life expectancy and persistent inflation.

Under the new framework: life-contingent annuities pay income for the annuitant’s lifetime; deferred annuities start payments after a specified deferment period; annuities with guaranteed payments ensure fixed payouts for a set period; and hybrid annuities combine guaranteed income with lifetime benefits.

“These products will allow retirees to turn accumulated savings into a steady and predictable income stream, reducing financial uncertainty in later years,” SECP said.

The regulator said the introduction of diversified annuity products will strengthen the retirement ecosystem, enhance financial security for retirees, and support the long-term growth of the insurance sector.