long report of gp fund
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INTRODUCTION
According to the Provident Fund Act 1925, and the Central Government (Class
IV Servants) Provident Fund Rules, 1966, it is mandatory for all Government
Servants to make share for General Provident Fund (GPF) from their salary on
monthly basis. This deduction is based upon the rates fixed by the Government
in different times. At this time, all receipts and disbursements of GPF are booked
in the Public Account of the Province. The net savings of the Fund (receipts
minus disbursements) are, however, not invested to cope with increasing liability
on the provincial budget. Presently, the accumulated accruals, which are Rs.32,
956.063 million during the CFY 2007-08.The Government of Sindh has no
comprehensive investment plan for meeting future liabilities like General
Provident Fund and other pension schemes. The amount, which is deducted
from employee’s monthly salaries, is being utilized by the Government of Sindh.
The liabilities are therefore further increasing which must be taken care of during
this period of self-sufficiency and increasing cash inflows. Under such
circumstances, the Sindh General Provident Investment Fund (SGPIF) was
established with effect from 01-07-2007, on the pattern of Sindh Pension Fund,
with seed money of Rs.2.0 billion which now reached to Rs 4 billion up to 2008-
09. Investment in SGPIF is to be increased gradually to the tune of Rs 2 billion to
a level when the government could meet its annual GPF liabilities. Sindh General
Provident Investment Fund Act 2008 has been promulgated in this regard. On
the pattern of GP Fund Sindh Government has established Sindh Social Relief
Fund (SSRF) which was established with seed money of Rs 3 billion in FY 2005-
06 with an announcement of Rs 3 billion annually with a broad objective of
moving towards direct intervention of providing relief to the vulnerable and
disadvantaged people (Ordinance, 2007). At present total available fund is
11.622(Approx :) billion up to June, 2008.
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YearOpening Balance
Releases during the
year
Profit during the
Year
Cumulative Total (End of
the Year)
2005-06 0 3,000 3,0002006-07 3,000 3,000 183 6,1832007-08 6,183 3,000 784 9,9672008-09* 9,967 2,000 1,232 13,199Grand Total 11,000 2,199 13,199
Table 8.3Sindh Social Relief Fund
Rs. in Million
(Finance Department, Budget Analysis Book, 2008-09 Government of Sindh)
This study covers two monetary areas of Sindh Government i.e. Sindh General
Provident Fund (SGPIF) and Sindh Social Relief Fund (SSRF).Here, it will be
mainly attempted to understand the benefits which can be accrued after the
process of investment of following two resources of Sindh Province, i.e.:
1) General Provident Fund Investment Fund (SGPIF).
2) Sindh Social Relief Fund (SSRF).
The Government of Sindh is undertaking various reforms to enhance its services
to its employees and the residents of the province at large. One such important
initiative is the establishment of GP Fund and Sindh Social Relief Fund (SSRF)
Reforms. Being the largest employer in the province, the responsibility of the
welfare of its employees is immense. There are presently more than 400,000
people on the payroll of the provincial government. Currently, budgetary
allocations are made every year to meet the pension and GPF liabilities. The
government started an independent GP Fund in 2007. As of today, the Fund
stands at Rs 4.479 billion and Sindh Social Relief Fund at 13.19 billion (Budget
Analysis Book 2008-09).
The provincial governments are vital components in the public finance structure
of Pakistan. Given the constitutional allocation of functions, they are responsible
for delivery of basic services like Irrigation, Agriculture Extension, distribution of
Agricultural Inputs, Education, Health, Road transport, etc. Traditionally,
recurring expenditures on Provincial services have been financed by own-tax and
non tax revenues and by transfers from the federal pool of taxes. As per law, the
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YearOpening Balance
Releases during the
year
Profit during the
Year
Cumulative Total (End of
the Year)
2007-08 2,000 2 2,0022008-09* 2,002 2,000 477 4,479Grand Total 4,000 479 4,479
Table 8.1Sindh General Provident Fund
Rs. in Million
Federal Government is responsible for the imposition of various taxes such as
Income Tax, General Sales Tax (GST) and Central Excise Duty, etc.(Constitution
of Pakistan,1973). Simultaneously, the Provincial Governments are also levying
certain taxes like Stamp duty, Excise duty and Entertainment tax etc.
Furthermore, the Provincial Government is constitutionally authorized to make
compulsory deductions from the salaries of Sindh Government employees in the
form of G.P Fund and SSR Fund etc. (Accountant General Sindh, 2005-06).
At present, the total accumulation of G.P Fund liability is Rs.32.956 billion up to
June 30, 2007. The total G.P Fund payment is Rs. 2,246.25 billion up to June30,
2007 by the Sindh Government, however, in terms of interest, it pays around Rs
3.5 billion per year to various employees and average markup rate is
approximately 12%. (Budget Analysis Book, 2007-08).
(Finance Department, Budget Analysis Book, 2008-09 Government of Sindh)
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0500
1,0001,5002,0002,5003,0003,5004,0004,5005,000
2007-08 2008-09*
Opening Balance Releases during the yearProfit during the Year Cumulative Total (End of the Year)
(Finance Department, Budget Analysis Book, 2008-09 Government of Sindh)
Cumulative G.P Fund liability (Rs. in Million)
Year Accumulated
Liability
Actual
1971-72 12
1976-77 68
1980-81 183
1981-82 228
1986-87 768
1991-92 3,022
1996-97 6,578
2001-02 17,458
RE
2006-07 Rs. 32,956
(Finance Department, Budget Analysis Book, 2007-08 Government of
Sindh)
Detail of Annual Interest paid by Government of Sindh
Fiscal Year Interest (Average %)
1971-72 to 1975-76 9%
1976-77 to 1980-81 12%
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1981-82 to 1985-86 14%
1986-87 to 1990-91 20%
1991-92 to 1995-96 20%
1996-97 to 1999-00 21%
2000-01 to 2005-06 13%
Total Average 15%
(Finance Department, Budget Analysis Book, 2007-08 Government of
Sindh)
Details Of Annual Amount paid by Government of Sindh.
Fiscal Year Interest Payment
(Rs. in Million)
1991-92 1016
1992-93 1441
1993-94 1143
1994-95 648
1995-96 868
1996-97 3092
1997-98 3766
1998-99 3826
1999-00 3627
2000-01 2912
2001-02 3084
2002-03 3151
2003-04 3228
2004-05 3531
2005-06 3083
Total 38416
(Finance Department, Budget Analysis Book, 2007-08 Government of
Sindh)
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the table shows the payment in different years but also indicates that the
maximum was paid in FY 1998-99 i.e. 38.416 billion.
Sindh Government is trying to initiate various reforms in order to enhance its
services and utility to its employees and other people of province. Sindh
Government is the largest employer in the province, the responsibility of the
welfare and care of its employees is enormous. In order to meet these liabilities
and to ensure continued growth of GP Fund and SSR Fund, various investment
options like strategic investment with the help of private sector will be analyzed.
The investment portfolio asset allocation is based on the SECP guidelines for the
employees of Sindh Government.
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2005-06 2006-07 2007-08 2008-09*
Opening Balance Releases during the yearProfit during the Year Cumulative Total (End of the Year)
(Finance Department, Budget Analysis Book, 2008-09 Government of Sindh)
It is imperative to note that these are Public Funds. The benefit of which is to be
reaped by old age retired employees of the Government of Sindh. Therefore, the
investment of resources cannot be too violent and protection of capital is of
principal concern. The investment should be made in such a way that yearly GP
Fund payment, Pension and other liabilities can expediently met. Secondly, to
make sure the proper utilization of SSRF into poor masses those who are into
desperate need. The most important focus of investment is to achieve highest
returns at a minimum risk. The term investment in this report is mainly
undertaken the two broad aspects of Government of Sindh. It includes the two
monetary resources of Sindh Province. In monetary aspect, a study is being
made about the total availability of GP Fund, its up-to date disbursement and
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piled up interest. Simultaneously, an attempt is being made to provide certain
suggestions in latter part of this study which are given for the investment of
available Funds into profit-oriented ventures.
Article 167 of the constitution authorizes the Provincial Government i.e. Sindh to
borrow on the security of the PCF (Provincial Consolidated Funds) limits as may
be prescribed by the Provincial Assembly.(The Constitution of Pakistan-1973).
But, this borrowing limit of province has been minimized by the condition that,
until there exist, an outstanding liability of a loan already made on guaranteed by
the Federal Government, therefore, it not comes under domain of Provincial
Government borrow loan without approval of Central Government i.e. Pakistan
Government. So, it is clear that Sindh province cannot make any attempt for loan
from external source except the permission granted by Central Government.
However, it is equally important to mention here that various resource of Sindh
Government like General Provident Fund and Sindh Social Relief Fund are
available and remain idle (earning minimum profit through TDRs) but did not use
in any profitable enterprise for the sake of revenue generation; which in turn
resulted in a liability over the shoulders of Government of Sindh.
The investment should be such that yearly pension like (payment of GP Fund)
and other expenses are conveniently met. The prime focus is to achieve highest
return but in such area where risk is minimum. There are many broad areas of
investment for Fund namely Debt, Equity and Money market with different risk
factors. However, money market includes different products with maturity of one
year, 6 months etc. It has also another Government bonds which is called
Treasury bills, CFS (Stock Market Instrument) and term deposits in different
banks either local or foreign.
DETAILS OF RECEIPTS AND DISBURSEMENT OF GP FUND
The policies on human welfare especially for government employees are always
one of the difficult tasks which include long services. The main consideration is
always given to service delivery and good governance. The services in
government sectors always require longer periods which are divided into different
scales which is simultaneously linked with certain financial limitations. For this
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purpose, good pension schemes and payment of liability is the need of hour. It is
usually seen that government servants are given an opportunity of social
security for security reasons and satisfaction. However, in some European pre-
Bismarck pension schemes for government employees were mostly based upon
the mechanism of earnings. The present era demands the maintenance of
unique and facilitating generous systems for all employees those who Serve in
public sectors. (Budget Analysis Book, 2008-09).The Budget Books of Finance
Department year (2007-08) shows the liability of GP Fund in following manner:
TOTAL RECEIPT OF G.P.FUND (Rs In Millions)
G.P.FUND ACCOUNTS
(2005-06)
BUDGET
ESTIMATE
(2006-07)
REVISED
ESTIMATE
(2006-07)
BUDGET
ESTIMATE
(2007-08)
Civil 4558.003 5467.293 5457.085 1074.302
Forest 63.032 6.796 2.170 2.149
Total
provident fund 4621.035 5475.089 5459.255 1076.451
Finance Department, 2006-07 Budget Book, Government of Sindh
TOTAL DISBURSMENT OF G.P .FUND (Rs In Millions)
G.P.FUND ACCOUNTS
(2005-06)
BUDGET
ESTIMATE
(2006-07)
REVISED
ESTIMATE
(2006-07)
BUDGET
ESTIMATE
(2007-08)
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Civil 1970.730 1819.565 1757.851 1074.302
Forest 19.960 20.958 20.958
TOTAL
PROVIDENT
FUND
1927.690 1819.565 1778.809 2045.42
(Finance Department, 2006-07 Budget Book, Government of Sindh)
The table shows that the disbursement of GP fund is increasing with every passing year
because of the increase in interest rate of GP Fund by the government and increase in
number of employees.
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Cumulative GPF Liability
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(Finance Department, Budget Analysis Book, 2007-08 Government of
Sindh)
The chart shows that the liability of GP Fund is increasing with every passing year and
reached at its peak in the financial year 2006-07.
Foreign Loans54%Cash
Development Loans20%
Accumulated GPF Liability
26%
(Finance Department, Budget Analysis Book, 2007-08 Government of
Sindh)
The review of Finance Department’s documents shows that the total
accumulation of GP fund is around 26% of the total liability of Sindh Government
Loans.
Cumulative GPF Liability (Rs in Million)
Actual RE
Year1971-
72
1976-
77
1980-
81
1981-
82
1986-
87
1991-
92
1996-
97
2001-
02
2006-
07
Accumulate
d Liability12 68 183 228 768 3,022 6,587
17,45
8
32,95
6
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(Finance Department, Budget Analysis Book, 2007-08 Government of
Sindh)
The total liability was just 12 million in the year 1971 which reached to 32,956
million in the financial year 2006-07 because of the abrupt increase in number of
employees.
This is quite apparent from the above discussion that the idea of establishing
merely Pension Funds for meeting all GP fund liabilities may not work to its
utmost. There can not be denying the fact that without embarking upon the
parametric and systematic reforms in pension system, we can not hope to tackle
the problem efficiently which at the same time requires to devise self employment
policies for poor people for their help and rehabilitation. (Finance Department
Documents,2006-07)
TOTAL INPUT OF SSRF
S.NO FY ALLOCATION
01 2005-06 Rs 3 billion
02 2006-07 Rs 3 billion
03 2007-08 Rs 3 billion
04 2008-09 Rs 2 billion
(Source: Sindh Government documents)
The SSRF was started with seed money of Rs 3 billion in 2005-06 and yearly
increased with supplements as shown above.
1.1 PROBLEM STATEMENT
Sindh province is replete with so many resources but unfortunately, these
resources did not produce any fruitful results because of mismanagement and
under utilization. Accordingly, there are numerous examples in which the
available resources in either form can be used up to its optimum level or best
results could be achieved but unfortunately such things did not materialize in our
country. Therefore, one of the most key research issues is "Investment of Sindh
Government’s Special Funds like GP Fund and SSR Fund". In this case,
following points are put under focus:
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a) To analyze the problems and various risk factors in the way of
Investment?
b) What will be the impact of new areas of Investment in minimizing the GP
Fund liability?
At present, according to an estimate, assets of billions of rupees are available at
the disposal of Sindh Government. it is high time for Government of Sindh to take
measures like establishment of G.P Investment Fund and SSRF and make
Investments which should have surely multidimensional implications. First, it will
bring the province out of the debt and its interest trap; secondly, the help could
be provided to needy people. (Standardized Public- Private Partnership Provision
Book, 2007)
1.2 STUDY OBJECTIVES
a. To evaluate different sectors of investments and their annual rates of
return.
b. To find new avenues and innovative methods through which the available
resources like GP Fund and SSRF be invested in various profit-oriented
sectors.
c) To recommend certain suggestions for reduction of GP Fund liability on
Sindh Government.
1.3 KEY RESEARCH QUESTIONS
1. Where to invest the available Funds into new profitable sectors?
2. To analyze the past performance of Debt and Equity market, Money Market,
etc.
3. Which areas should SSRF consider through which some change could be
brought into the life of poor people?
1.4 LIMITATIONS OF STUDY
The study covers only two Funds of Sindh Government i.e. GP Fund and Sindh
Social Relief Fund because of the time constraint and availability of data.
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CHAPTER 2
REVIEW OF LITERATURE
2.1. INVESTMENT OF SINDH GOVERNMENT’S SPECIAL
FUNDS - LOCAL PERSPECTIVE
2.1.1PUNJAB GENERAL PROVIDENT FUND
The study of Punjab General Provident Fund Shows that Punjab Government
has established Punjab General Provident Fund in 2007 through an ordinance of
clause (1) of Article 128 of the constitution of Islamic Republic of Pakistan (see
Ordnance of Punjab Government) with an idea to create revenue for the
discharge of the General Provident Liabilities of the government. Besides to
initiate efforts for good governance in the province . The GP Fund in which the
amount came from the Reserve General Provident Fund in the Public Account
which is maintained by the Province i.e. Punjab. The funds which are placed in
the Reserve Fund by the Punjab Government are the subject of Public Account.
It is mentioned in Article118 (2) of the Constitution of Pakistan. The review of the
papers shows that anything contained in section 7, the investment body will
make an investment for different years. Secondly, as per law, investment can not
be made in any foreign market without approval of Government. Thirdly no
amount more than 25% of the Reserve Fund in one Financial
Institution .Fourthly, no amount more than 75% of Reserve Fund in Government
Bonds Fifthly, no amount of more than 5% of Reserve Fund in an issue of
Corporate or other bonds or short term financial instruments, cumulatively.
Sixthly, no an amount more than 5% of Reserve Fund in a unit trust authorized
for sale in Pakistan. Finally, no any investment can be made in any security or
asset prohibited by rules. (Punjab General provident Investment Fund Ordinance,
2007).
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2.1.2 Sindh Finance Department’s Documents
The review of Finance department’s documents shows that Sindh Government’s
established Sindh General Provident Fund, Sindh Social relief Fund and Sindh
Pension Fund by Sindh government. The study revealed that these Funds were
created by the Provincial Government for reducing increasing pension dues and
to analyze the Fund’s capacity in order to meet the pension liabilities. It is also
one of the aims to minimize the problems of Sindh Province. Sindh Government
established Sindh Pension Fund (SPF) in the year 2002, in which initially Rs.
1200 million were placed, while SGPIF was established with Rs 2000 million
while SSRF was established with initial money of Rs 3000 million. The main aim
is to increase it with supplements on yearly basis. Today SPF stands at
Rs13.888 Billion, SGPIF at 4 billion(approx: ) and SSRF at 11.96
billion(approx: ).Simultaneously, the level of pension liabilities has also risen to
Rs. 6.782 Billion.(Finance Departments Books, Volume 1 ,3 and 4). One exercise
has been initiated to explore the new trends of capital gains and pension
liabilities. The following graph of SPF indicates liabilities of 36 years:
The graph shows that uninterrupted investment of 3.000 Billion on annual basis
till 2033 and investing the same @ of 12% per annum would interest the level of
pension liabilities in the year 2037.
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Figure
Source: Sindh Government document
The graph represents that Fund would take 30 years to overcome pension
liabilities. The Fund volume, currently, is around Rs.11.97 Billion. Therefore, the
investment strategy should unique, which may not harm the principal amount. So
the liabilities can be adjusted for profit of 9% on annual basis. (Finance
Department’s Documents, Volume# 1, 3, 4)
2.1.3 The Study of LUMS Pension Fund Project
The Review of Sindh Pension Fund Project (2007) conducted by a group of
LUMS.
Sindh Pension Fund was creating in 2005 with a broad objective to meet the liabilities of
pensioners in Sindh Province. The total Liability of Sindh Pension Fund is around 5.5
billion which is increasing at the rate of 9% annually. This Fund was initially started with
seed money of Rs 2 billion in which annual grants are injected for its growth.
S. No. Year Input to Pension Fund in Billion (PKR)
1. 2002-03 1.2
2. 2003-04 1.2
3. 2004-05 1.2
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4. 2005-06 2.2
Sub Total 5.8
Interest Accrued 0.5
Total PKR 6.3 Billion
Source: Sindh Government document
Annual Aggregate Pension Expense from 2001-2004
Year 2004-05 2003-04 2002-03 2001-02
2000-
01
Pension
Expenditures
(PKR) 5.42 billion 5.1 billion 4.98 billion 3.9 billion
3.4
billion
Source: Sindh Government document
Analysis of this project reveals that as per law the money in Funds is a Public
Money which can not be utilized for any other purpose except for which they are
created. This Study discussed the investment options of Sindh Pension Fund.
The study provides a comprehensive roadmap with potential areas in which
investment can be made. The study discussed in detail the areas like Equity
Market, Money Market, Stocks and other sectors of Manufacturing. As per study,
Sindh Pension Fund is a Public Fund and allocation came into it through
budgetary allocation on yearly basis by Government of Sindh. Therefore, there
are certain Legal constraints in which no body can invest in other areas which
are prohibited by law. (See Sindh Pension Fund Ordinance, 2005).The study
discussed various sectors of economy like Banking, Insurance, Manufacturing,
oil, PIBs, TFCs, Mutual Funds, Saving Schemes, NIT etc. the study of the report
shows that areas like Stock where the rate of return is high but it also has high
risk which is not a suitable area for investment. The Study take into account the
short term, intermediate and long term needs of the employees from BS 1 to 22
whose number is not less than 95000. (LUMS, 2007)
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Age Bracket and Annual Salary
Sourc( Pakistan Social and Living Standards Measurement Survey,CWIQ2004-
05)
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Expected Present Value of Liability of Current and Future Pensioners
Current EmployeesBPS Present Values (PKR)
1 11,361,559,6432 2,884,020,7613 391,319,2164 2,313,056,5865 22,092,974,9426 2,319,139,5207 28,595,649,2328 453,253,2889 22,343,481,578
10 372,669,52711 3,701,077,86712 1,046,860,85113 192,004,68214 7,465,205,27315 790,700,81716 13,393,046,53317 10,846,700,00218 6,798,201,70919 3,062,428,33920 593,978,72621 17,398,88922 4,163,033
Current Employees 141,038,891,013Existing pensioners 33,341,512,830Grand Total 174,380,403,842
(Sindh Pension Fund Report, 2007 by LUMS)
In this study four types of schemes are taken into account i.e. Aggressive,
Balanced, Conservative and Ultra conservative. In order to meet these liabilities
and to ensure continued growth of the pension fund, various strategic investment
options were analyzed. The investment portfolio asset allocation is based on the
SECP guidelines for pension schemes.
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LUMS Asset Allocation Brackets for Different Portfolios
Portfolio Debt Money
Market
Equity
Very
Conservative
Min
20%
Min
65%
Nil
Conservative Min
40%
Min
35%
Min
10%
Balanced Min
60%
Min
10%
Min
15%
Aggressive Min
40%
Nil Min
40%
(Sindh Pension Fund Report, 2007 by LUMS)
It is imperative to note that it is a public fund which is created for the benefit of
old-age retired employees of the Government of Sindh. Hence the investment
approach cannot be too aggressive and preservation of capital is of prime
concern. The investments should be such that yearly pension expenses are
conveniently met. The aim of the fund is to achieve highest return, so
discouraged too aggressive policy. Broadly mentions about three broad areas of
investment, namely; Debt, Equity and Money market. The money market
includes instruments with maturity of one year or less. These include government
bonds called Treasury Bills, CFS (stock market instrument) and term deposits at
banks. Debt Market comprises of long term government bonds called Pakistan
Investment Bonds (PIB) and Corporate Bonds called Term Finance Certificate
(TFC). The instruments available in Equity Market are shares of listed companies
and certain mutual funds. SECP guidelines give an option of four different
investment portfolios ranging from aggressive (equity based) to highly
conservative (debt based). Risk and return measures for these four asset
allocation mixes have been calculated to give the client options to choose
according to his risk appetite. In addition, a fifth portfolio, called the customized
portfolio has also been built keeping in mind the liability structure of the pension
expenses. The criteria for evaluating Debt and Money market instruments was
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historical returns, historical risk (variation of returns), liquidity, credit worthiness,
market development, market capacity and future outlook. Since the TFC
(corporate bond) market is highly illiquid and very underdeveloped, currently no
investments are recommended in this instrument. However new issues could be
evaluated and incorporated into the portfolio. In debt instruments Pakistan
Investment Bonds (PIB) of different maturities have been picked in equal
proportion with the fund going into bonds of all maturities (3, 5, 10, 15 and 20).
The reason behind the selection of equal investment proportions for government
bonds of different maturities is the need to meet pension payments over a long
time horizon. This could be also termed as the varying liquidity requirement.
Money market allocation is made similarly in equal proportion in T-bills of all
maturities (3, 6, 9 and 12 months) and Bank Term Deposit of 1 year. CFS is a
money market instrument offered by brokerage houses whose credit worthiness
is questionable, therefore these are also discredited. On the equity side, analysis
was done on the sector level. The KSE-100 market is divided into a number of
sectors, such as power generation, commercial banks, insurance to name a few.
These sectors were analyzed based on risk and returns, market capitalization,
liquidity and future outlook. A qualitative and quantitative analysis was conducted
to short-list sectors for the portfolio asset base. Investment decisions were made
based on ground reality rather than simply number crunching. Sectors that fit in
all the criteria include Commercial Banks, Power Generation, Insurance, Food
and Allied, Oil and Gas Exploration, Chemicals, Cement and Oil Refinery.
Karachi Stock Exchange 100 Index data together with stock and cash dividend
information was used in sector evaluation. (LUMS, 2007)
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Risk Return Characteristics of Sectors represented in the KSE-100Index
(Sindh Pension Fund Report, 2007 by LUMS)
Comparable pension funds of large institutions of Pakistan were also studied to
understand best practices. Market intelligence was also gathered from portfolio
managers of well performing equivalent funds i.e. mutual funds, provident funds
etc.
Portfolio optimization technique led to the following results for different
investment scenarios outlined by SECP.
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Sector Return RiskCommercial Banks 61.8% 41.3%Oil & Gas Exploration 94.0% 85.0%Cement 51.0% 113.4%Telecommunications 11.4% 44.4%Fertilizers 28.5% 74.6%Investment Banks/companies 56.7% 50.0%OMC 31.7% 82.1%Power Generation 41.2% 58.2%Chemicals 41.8% 32.5%Insurance 85.9% 60.8%Mutual Fund 30.2% 54.2%Transport 50.3% 123.2%Refinery 46.6% 46.1%Auto Parts 0.0% 17.4%paper 18.3% 24.1%Cable & Electrical Goods 53.2% 36.3%Modarba 19.2% 27.2%Tobacco 18.6% 57.3%Leasing 10.4% 30.4%Pharamaceuticals 25.7% 29.7%Sugar 82.8% 69.8%Engineering 31.8% 47.4%Synthetic & Rayon 27.9% 31.2%Food & Allied 30.1% 20.4%Automobiles 40.0% 29.5%Glass & Ceramics 39.7% 35.7%Leather 39.7% 35.7%Jute 16.9% 43.4%Woolen 9.2% 33.7%Miscellaneous 50.9% 42.2%
Risk, Return and Asset Allocation Characteristics of Investment
Portfolios
Aggressive Balanced Conservative Very Conservative CustomizedReturn 36.88% 22% 12% 7% 19%Risk (Standard Deviation) 10.77% 6% 2% 2% 4%Equity 65% 35% 10% 0% 25%Debt 35% 55% 75% 40% 60%Money 0 10% 15% 60% 15%
Risk & Return Results
(Sindh Pension Fund Report, 2007 by LUMS)
Annual Capital Requirements for Sustainability of Investment Portfolios
Annual Contribution (in PKR Billion) 2a
4 4 2 4 6.5 2 4 13 2 4 18.25 2 4 9
Sustainbale number of years 13a
20 20 5 11 20 3 7 20 2 6 20 3 8 20
Customized (19% return)
Annual Contribution Requirement
Aggressive (37% return) Balanced (23% return) Conservative (12% return) Very Conservative (7% return)
(Sindh Pension Fund Report, 2007 by LUMS)
If the investment decision were to be made under SECP guidelines only, then the
conservative portfolio is recommended offering a return of 12%. However with
relatively greater exposure to the equity market (see customized portfolio), return
would be incrementally high (19%) to match the liability growth of 18% at a risk of
4%. This is the customized portfolio and is highly recommended. Both the
recommendations give higher returns than the Sindh Government’s present
investments in Bank Term Deposits (9-11%) and match the rate of increase in
liabilities. (LUMS, 2007)
It would be relevant and beneficial to analyze other countries strategy regarding
investment of special funds to gain further insight into this field.
2.2 INVESTMENT OF SINDH GOVERNMENT’S SPECIAL
FUNDS - REGIONAL PERSPECTIVE
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2.2.1HONG KONG
The review of Hong Kong Mandatory Provident Fund shows that there are certain
amendments are being made in Provident Fund schemes which came into effect
from December 1, 2006.These amendments provide a road map for permissible
investments of Funds and pooled Investment Funds. Under the new
amendments, the funds can be invested in other securities such as ADRs GdRs
and a few other designated depository receipts. It further allows for certain types
of certificates which is now onward known as other securities. However, it is
mandatory that these securities and certificates are listed in stock exchange. As
per amendments of law, the securities which listed in stock are main instrument
of investment for MPF fund but the total value of such securities subscribed could
not exceed the amount of money held on deposit for the constituent fund.
Through these amendments, it is also permissible that investments can be made
in currency forward contracts. this forward contracts should have back of
financial institution or an eligible overseas bank. It is further restricted that in new
revised regulations the funds of a constituent portfolio must not be placed on
deposit and could not be utilized to get forward contracts with a branch outside
the boundary of Hong Kong of an authorized financial institution incorporated
outside Hong Kong except the respective institution satisfies that it has a credit
rating which is formulated by MPFA. (Deacon, 2007)
2.2.2 THAILAND
Chanchai Supasagee, Corporate Governance Director explains that one of the
largest institutional investors in Thailand is the Government Pension Fund
(GPF).It was established in 1997 primarily towards constructing a full fund
pension system. The GPF is a defined contribution pension fund which based
- 23 -
upon pay-as-you-can system which is designed for officials of the Government of
Thailand. The GPF works as a private owned entity. The Employees pool 3% of
their salary to the Fund and the Thai Government also bear the same share.
Nearly $9billion invested in fixed income (68% Thai, 9% global), public equities
(13% Thai, 1% global), property (3%) and alternative investments, as well as
mainly Thai private equity (6%). In 2005, the fund begun to start and is in the
process of amending its policy to allow more exposure to equity and overseas
investments. Assets are both within and outwardly operated. 1.1 million
Government officials are the total members including servants from all sectors of
life.
For the sake of maximizing financial returns for members, being a Thailand’s
largest funds which based upon long-term investment, the GPF is likely to show
a major role in the development of the Thai economy. One of the GPF’s main
purposes is therefore to set up and encourage good investment practices in
Thailand. The GPF opines that the development of a sustainable pension system
will allow for careful financial organization and the intensification of the Thai
monetary markets. The investment decisions have always an impact on prices,
corporate and market practices. For organizational credibility, member
confidence and international respect, it desires to make certain that its own works
are supervised by high standards of corporate governance. (UN Environment
Program Finance Initiative and UK social Investment Forum, 2007)
2.3 INVESTMENT OF SINDH GOVERNMENT’S SPECIAL
FUNDS - GLOBAL PERSPECTIVE
2.3.1 SWITZERLAND
Michel Ducommun, Vice-President, Employees’ Representative describes that
CIA is the main contingency fund (pension and insurance) of the canton of
Geneva, Switzerland. It covers all public education and civil servants of the
Federal management of the State and the assets are approximately $5 billion
tear evenly between equities, bonds and real estate. The possessions are
outwardly managed with the exception of the real estate folder. The total
membership is 35,000 active members and pensioners.
- 24 -
The CIA has measured sustainable development in its investment strategies and
policies for over 20 years. The CIA has a democratic management arrangement
in which there is wide participation by cantonal pension fund members and takes
a tough attention in the social aspects of its investments. The CIA’s highest
leading body, the meeting of delegates, is composed of 180 representatives
elected by pension fund members. The assembly of delegate’s votes on statutes
and major policies, like investment policies and asset allotment strategies. In
1996, the CIA placed its answerable investment policy in its statement of
investment principles, which is publicly available. The policy was discussed,
debated and accepted by pension fund members by means of the assembly of
delegates (http://www.cia.ch).
In Switzerland the total number of pension funds in 1998 was about 3800
representing about 3800 representing around 3.2 millions insured workers. The
total assets under management are still rising and amount to about 428 Billion
Swiss Francs. The major size approx: 50% in 1996 of approximately a third of the
pension scheme members take part in a “collective Insurance Plan” which
frequently accessible to employers by main banks and insurance companies
which also control the investment procedure; the restraint of the probable power
by the workers becomes obvious. About 50% of the assets in management are
invested in some sort of permanent income securities and one forth is invested in
equities. Similarly, 15 of those 25 % stand for investments in Swiss Stocks and
the left over fraction is billed in international stocks. These 15% or nearly 64
billion CHF make up for 6.6 % the total market capitalization of the Swiss Stock.
Exchange (Oesch 2000). Subsequently, another research focusing upon 252
Pension Funds are out of two Funds considers the investment choice for stocks
and bonds to an exterior source i.e. banks (Robecco 2000). Another study put
light on 33 Public Pension Funds shows that segment of public pension funds is
higher 27%. However, when the sum invested in this way, the statistics between
diverse sources contrast significantly. Statistically, the lowest estimate is one
billion Swiss Francs (Curti 2000), while uppermost estimation based on total
ecological investment of 4 billion Swiss Francs amounts to 2 billions considering
- 25 -
that 50 % of four billions is in custody of Pension Funds. Such figure seems more
sensible because only two major groups of actors announced about invested 1.7
billions, which compared to 105 billions that are invested in equities. (UN
Environment Program Finance Initiative and UK social Investment Forum, 2007)
2.3.2 CANADA
Marie-Claude Provost, Senior Director, Policies and Compliance explains that
Caisse de dépôt et placement du Québec was shaped in 1965 by an act of the
Canadian national assembly to administer the funds shared to recently formed
universal pension plan, the Québec Pension Plan. For years, so many other
public-sector organizations also turned out members. The total assets are nearly
$143.5 billion invested in domestic and international public and private equity,
bonds, real estate, currencies and hedge funds. Out of which, 80% are within
managed and 20% are outwardly managed. The total Membership is initially
significant, the Caisse managed only the funds of the Régime de rentes du
Québec (RRQ). For many years, large number of depositors, like public bodies,
has been included to the RRQ. ON December 31, 2006, the Caisse have 22
depositors – pension funds, insurance plans and a variety of funds. Nearly, 60%
of contributions from these bodies come from persons work individually. The
pension plan for governmental bodies’ (RREGOP) is the main shareholder.
Usually, it becomes mandatory plan for Quebec’s employees, with offerings
shared by employees.( http://www.lacaisse.com).
Statistically, it reveals that in Canada, assets of retirement income programs are
about 935 billion CAD up to 1998 which is 16.4% increase from1996. Employer
strategy reaches to 644 billions of which 24.5% or 438 billions are in trusted
pension funds. An increase is investment in stocks is 33.9% or via share 24.5%
and the bond segment is reducing 31.1%.The investment in foreign assets
restricted by law to 20% i.e. at 17% level. (Source: Canadian Social Review,
Dec: 2000, www, social investment.ca) The assets of socially responsible
investments in Canada up to June 30, 2000 were USD 5.77 billion, in socially
screened mutual funds it stands to USD 4.58 billion. Total assets held by
companies are around 14.3 billion USD. Big portion of this money is invested on
- 26 -
behalf of institutional customers, which includes pension funds, endowments,
foundations, religious organizations and public institutions, such as hospitals and
universities. In addition to it 27.2 billion in assets of institutional investors
managing their funds totally in house with reference to social and environmental
issyes. Nearly, 85 USD is in investments comes under locally controlled
community investment organizations, such as micro loan funds. The 49.9 billion
USD socially responsible investment assets represent 3.2% of the retail mutual
fund market and the institutional investment market. Such figures are based on
total mutual fund assets of USD 420.8 billion controlled by investment mangers
scheduled in yearly profit Canada Survey(Nov: 2000) for total assets of USD
1553.5 billion(June 30, 2000) grown 75% from USD 5.9 billion (June 1998) to
USD 10.35 billion (June 2000). The trend indicates the growth rate of the mutual
fund market in general. Assumptions based upon figures endorsed through IFIC,
the assets of IFIC increase at the rate of 30% from USD 322.7 billion in June
1998 to 420.8 USD in June 2000. It reflects that social investment assets
increase more than double rate of the mutual fund industry as compared to whole
industry. (UN Environment Program Finance Initiative and UK social Investment
Forum, 2007)
2.3.3 USA
Dennis Johnson, Senio Portofolio Manager, Corporate Governance states that
CalPERS was established by state law in 1932 and is the main public pension
plan in the US and the third largest in the world in terms of asset under
management. The Pension plan provides a selection of retirement and health
repayment programs and Services to the State of California’s public employees,
retirees, and their families. CalPERS is a clear benefit retirement plan. Total
assets are just about $230 billion. Assets are managed within and outwardly and
the fund employs both active and passive investment strategies across four asset
classes: Global equities, global fixed income, real estate, and alternative
investments. CalPERS believe it a long-term, universal proprietor. The total
membership is 1.5 million public employees retirees, and their families and more
than 2,500 public employers.
- 27 -
CalPERS is a leader in the area of corporate governance. Their approach is best
explained as the careful work out of possession rights with the aim of increasing
shareholder value while reducing risk. The innermost rationale, that shareholders
are equity owners in the company and must be active and sensible in the use of
their privileges in the management of their investments, is based on the concept
that shareowners together have the control to direct the course of corporations.
The Pension Plan believes economic affluence can be either shaped or cracked
through shareholder activism and hence must be done sensibly. Corporate
governance is vital to CalPERS’ ownership practices and is used as a instrument
for both monitoring performance and enhancing value. www.calpers.ca.gov and
www.calpers-governance.org
In USA the Pension Funds Control financial assets of more than 6.7 trillion USD,
of which state and local government employee withdrawal funds control over one
third of these assets, or 2.4 trillion USD (CALPERS).Total investment assets
under supervision in the US is 16.3 trillion USD within society accountable
investing of major investing institutions totals 2.1 trillion USD or roughly 13% of
the total invested assets under management. Generally responsible investment
increase at twofold the rate of the total market between 1997 and 1999. The
number of screened mutual SRI funds increased to 195 in 1999 from 139 in 1997
and just 55 in 1995(SIF 1999). The other statistics point to the degree and
impetus of SRI that 180 main institutions holding 650 billion USD are engaged in
SRI equals approx: 10% of the total funds under management (D’ Antonio,
Johnson, Hutton). In 1999 25% of the scheduled companies are owned by
Pension funds (AFL-CIO 1999). The total workers capital world wide is Approx:
11 trillion USD (AFL- CIO 2000) with 5 trillion USD pension savings in the US
(AFL-CIO 1999).Another basis explains that 162 billion USD of the total 7 trillion
assets under management in the US is organized under publicly screened
enterprises. Half of it or approximately 80 billion USD are Pension Funds or
institutional investors other than Pension Funds. This would mean that 0.23% of
- 28 -
the total assets under management are publicly responsible investments. (UN
Environment Program Finance Initiative and UK social Investment Forum, 2007)
2.3.4 UK
The Environment Agency Pension Fund (EAPF) is the 20th largest member of the
UK’s Local Government Pension Schemes (LGPS) and is the biggest 100
pension funds in the UK. The assets are nearly $2.7 billion all outwardly
managed. There are 18,000 members.
Environment Agency is a most important public sector organization devoted to
caring and improving the environment for tomorrow’s generations can have a
cleaner and world. This Agency take into account as it important to line up its
values with the investment principles of its pension fund and as such the
Environment Agency Pension Fund (EAPF) seeks to manage its investments,
which, financially vigorous and environmentally responsible. For year 2004, for
several years of poor stock market proceeds and media criticism, the Fund was
invested in highly polluting industries, EAPF reviewed its investment policy, in
2005, it initiated its responsible investment policy to make sure that investment
managers take account of environmental issues and other long-term risks and
opportunities which can affect financial returns. (www.environment-
agency.gov.uk).
In UK, on 3rd of July 2000 a new amendment to the Pensions Act 1995 was
enacted that demands the trustees of occupational Pension Schemes to reveal
their policy on socially responsible investments (SRI) in their declaration of
Investment Principles. UK Social Investment forum decides in a recent study of
the UK’s top 500 occupational pension funds that (UKSIF 2000). It further
explains that 59% of Funds are incorporating SRI principles into their investment
process, through Fund Manager or via engagement. Funds represent 78% of the
assets surveyed and 48% of Funds have requested that their fund manager take
account of the financial requirements of environment and social aspects when
investing. (UN Environment Program Finance Initiative and UK social Investment
Forum, 2007)
- 29 -
Year 1999 1993 1996 1999
Total Assets
UKP millions
321 728 1480 3197
Number Of
Funds
30 41 45 60
(Dr Andreas Strum and Micheal Badde, 2001 Socially Responsible Investment by
Pension Funds and UN Environment Program Finance Initiative and UK social
Investment Forum, 2007)
.The review of literature shows that UK is one of the leading Developed countries
of the world which provides so many opportunities to its investors. It has a
diversified mechanism of investment through which various Investments can be
made. Mutual Funds which vary in between 4.7%-7.8% per week are one of the
most cost effective ways to own a diversified, professionally managed portfolio.
Mutual Funds allow you to invest in several different companies at a fraction of
the cost of buying individual units of each of the companies in similar proportions
to the mutual fund. Mutual Funds allow individuals allow pooling, their savings in
a portfolio of investments managed by professional money managers. Because
of the large amount of money in the pool, Mutual Funds can diversify a portfolio
more widely than individuals may be able to when investing on their own.
Likewise, Mutual Funds the other option is Premier Offshore. It varies from 5.9%-
8.3% per week. The Offshore generally means any jurisdiction, wherever
geographically located, which is advantageously different from one’s own
domestic financial environment. The advantage of Premier Offshore take a
number of forms; a tax free regime, making increased performance achievable
where assets can be held in confidence, and the timing of tax payments and
mitigation of the rate at which they are levied can be managed by investing
offshore.(UN Environment Program Finance Initiative and UK social Investment
Forum, 2007)
Rob Bauer, Head of Research states that in Netherlands, ABP is the pension
fund for employers and employees in the service of the Dutch government and is
one of the second largest Funds. It ensures declaration of income security
- 30 -
against any risk like death or retirement, based on the principles of cohesion and
less profit. Approximately an assets of $265 billion of which 55% is invested in
equities and alternatives, 43% in fixed income and 2% in other investments. ABP
manages 80% of its assets within. The residual 20% is managed by outside
investment managers. Membership is nearly 2.5million customers: 4,317 allied
employers, 1,113,000 in active service, 761,000 former participants and 697,000
pensioners.(Web: http://www.abp.nl).
Specialist mandates: ABP is investing in Sustainability: The Loyalis Global
Sustainability Fund. It assists in practitioners and scholars understand how
businesses and financial markets can promote sustainable development by
considering ESG issues. ABP operates a portfolio of investments which is
selected, managed and divested on the basis of ESG issues. Around $190
million international fund, managed by Loyalis Global, is invested in companies in
which profit is continuous. This best portfolio serves as an experiment for future
activities.(http://www.corporate-engagement.com)
2.3.5 AUSTRALIA
Steve Gibbs, CEO Aria gives services and products to employees of the
Australian Government through the schemes like Commonwealth
Superannuation Scheme (CSS), the Public Sector Superannuation Scheme
(PSS) and the PSS Accumulation Plan (PSSap). The assets are roughly $13.5
billion. All assets are externally managed with 30% of the portfolio invested in
Australian equities and 25% invested in global equities. Aria considers being one
of the long-term universal investor in the Australian market. The membership is
around 305,000 members.
The government pension related problems might have taken birth some times
back; yet, they were recognized only in the early twentieth centuries. State
pensions were being transformed into privately-owned pensions in the early
1980s, especially in Latin America and Eastern Europe. The aims of these
pension reforms were, on one hand, to signal that states were becoming
vulnerable to the rising pension liabilities and could not support these financial
burdens and, on the other hand, to ensure that private sector provision of old-age
- 31 -
security be expanded, and the individual responsibility for old-age pensioners is
strengthened. These reforms also ensured that the funds are independent
financial entities and that each worker chooses his or her own pension fund. This
has been called a “worker-choice model” (Lindeman et al. 2000: 34). The idea of
reforms in state pension sprang from weak social and cultural values, breaking
up of extended family system, increasing old age group with lower fertility rate,
and the skeptical view towards the ability of the state to honor its promises
(Arthur, 2006).
2.3.6 LATIN AMERICA
Carmelo Mes-Lago (1996) identifies three major sets of reforms, most
importantly, to have a demarcation line for the extent of pension privatization
scheme.. He is of the view that most of the Latin American Countries like Mexico,
Chile and Bolivia etc had converted from Public Sector Pension System to fully
liberalized Private Pension System and drew all future workers to opt for new
system. Peru and Colombia adopted parallel system which meant that state
owned system of pension remains effective and competes with newly
establishing private pension. Another mode of pension privatization exists in
Argentina, Uruguay and Poland etc where workers are allowed to contribute in
government managed pension schemes and can benefit from both the system.
(Carmelo Mes-Lago, 1996)
The early efforts made towards pension privatization came from Chilean
Government, which adopted a Defined Contribution (DC) pension scheme with
privately managed funded program? Other countries also followed suit and
switched over from state controlled Defined Benefits (DB) scheme to neo liberal
pension model based on privately managed Defined Contribution pension
system. Some countries however, introduced innovative variants in this model
depending upon their inherent social and cultural norms, like Mexico entirely
privatized its Social Security System, Argentina pursued a mixed public/private
pension system, Whereas, Brazil is still struggling with pension reforms.
- 32 -
Madrid rightly says, “Never in the history of social security had so much change taken
place in such a short period of times. It would be incorrect to consider that the problems
relating to state pension are associated with developing countries only. The ability of the
state to meet the pension dues is sceptical in the developed world as well. In Italy,
pensioners are reluctant to go along with the state pension system, because they believe
that the investment of their pension income in the private sector would ensure more yield
than in the public sector. The inflow of information system has also empowered the
pensioners in developing countries far better than before and they seem to have a better
comprehension of the state monetary system. (Madrid, 2004)
- 33 -
CHAPTER 3
3.1 INVESTMENT OF SINDH GOVERNMENT’S SPECIAL FUNDS:
POTENTIAL AREAS OF INVESTMENT
The documents of Finance Dept: shows that there are many potential areas as
authorized by the constitution of Pakistan and SECP Guidelines. Generally in
Pakistan, the concept of Investment in other sectors has on adopted. Currently,
majority of the resources are run under the control of Government, however,
presently, the idea of Investment is taking roots. Similarly Sindh Province
constitutes an integral part in skeleton of national economy. Sindh Province
provides 65% of the revenue. It has a big financial hub at Karachi and has the
availability of huge resources which can be invested in following sectors. So
following are certain potential areas of investment are discussed:
3.2 INVESTMENT OPTIONS THROUGH DEFENCE SAVING
CERTIFICATES
3.2.1 NATIONAL SAVING SCHEME
National Saving Scheme (NSS) is owned by Government of Pakistan. It includes
four types of investments, i.e. Defense Saving Certificates, Special Saving
Certificates, Regular Income Certificate and Bahbood Saving Certificates. The
Defense Saving Certificates have maturity of 10 years and interest is paid on
yearly basis. The maturity of Special Saving Certificates is 3 years and interest
is given twice a year. Regular Income Certificates provides maturity of 5 years
and interest/profit is not paid on yearly basis but on month wise. Bahbood Saving
Certificates have maturity of 10 years and usually utilized for senior citizens
above 60 and for widows also. In this scheme, month wise interest payment
system is adopted. (www.savings.gov.pk )
S.NO NAME OF SAVING
CERTIFICATE
RATE OF
RETURN
RATE OF
ZAKAT
NET
RATE
OF
- 34 -
RETURN
01 Behbood Savings
Certificates
15% 2.5% 12.5%
02 Pensioners Benefit
Account
15% 2.5% 12.5%
per
annum
03 Regular Savings
Certificates
13.3% 2.5% 9.8%
04 Special Saving
Certificates/Accounts
12.8 to
14.0%
2.5% 11.5%
05 Savings Account 9.0% 2.5% 6.5%
06 Defence Saving
Certificates
Under
consideration
- -
( w.e.f 2008)(Source: Documents of Directorate of National Savings)
The above table shows that the average rate of return is around 12.5%
annum in different years under different schemes.
- 35 -
3.2.2 INVESTMENT OPTIONS THROUGH NIT
NIT Financial Highlights 2002 – 07
(see: www.nit.gov.pk )
The table is showing that Average Dividend yield is around 14.4% in the FY
2007 while it was 15.02% in the year 2006.This depicts that the investment
in NIT is a viable option with least risk because it guaranteed by Government
of Pakistan.
3.2.3 INVESTMENT OPTIONS THROUGH MUTUAL FUNDS/ PIB
Returns from 2003- 2007
INVESTMENT OPTIONS THROUGH MUTUAL FUNDS
TOP TEN PURE EQUITY FUNDS (JAN-MARCH-2008).
S.NO NAME OF FUND RATE OF RETURN
01 Crossby Dragon 20.63%
02 UTP A30+ 10.40%
03 ATLAS STOCK MARKET 10%
04 UNITED STICK ADVANTAGE 9.8%
- 36 -
05 AKD Opportunity 9.29%
06 AKD Index Tracker 7.47%
07 AMZ Plus Stock Market 7.4%
08 KASB Stock 7.35%
09 HBL Stock 7.17%
10 Pak Stock Market 6.93%
(Source: IGI Fund Sheet, monthly bulletin, 2008)
The average rate of return in different years is around 9.64% which is also
significant one with certain amount of risk .However, Crossby Dragon fund has a
return of 20.63% which is one of the best option.
RATES OF ISLAMIC MUTUAL FUNDS
S.NO NAME OF FUND RATE OF RETURN
01 Meezan Islamic Fund 15.2%
02 Pakistan International Islamic Fund 12.5%
03 Atlas Islamic Fund 12.4%
04 Dawood Islamic Fund 9.4%
05 United Composite Islamic Fund 9.17%
06 UTP Islamic Fund 6.8%
(Source: IGI Fund Sheet, monthly bulletin, 2008)
The table shows that Meezan is offering rate of return around 15.2%on
investment of one year.
- 37 -
RATES OF BEST PERFORMING MULTI ASSET FUNDS (July-March)
S.NO Name Of Fund Rate of Return
01 NAFA Multi Asset 15.10%
02 JS Fund of Funds 13%
03 UTP Capital Protected-1 9%
04 UTP Balanced 9.7%
05 Faysal Income & Growth 8.0%
(Source: IGI Fund Sheet, monthly bulletin, 2008)
NAFA shows that average return is 15.1% which is one of the best options for
investment.
RATES OF TOP TEN INCOME FUNDS (9 months FY07-08)
S.No Name of Fund Name of Return
01 AMZ Plus Income 10.43%
02 AKD Income 10.12%
03 Dawood Money Market 10.09%
04 KASB Liquid 9.87%
05 Faysal Saving Growth 9.78%
06 IGI Income 9.78%
07 MCB Dynamic Cash 9.65%
08 NAFA Cash 9.63%
09 Alfalah GHP Income Multiplier 9.35%
10 Reliance Income 9.32%
(Source: IGI Fund Sheet, monthly bulletin, 2008).
- 38 -
3.2.4 PAKISTAN INVESTMENT BONDS (PIB)
Pakistan Investment Bonds (PIB) are those instruments which are invested for
long term securities. It includes the maturities like 3, 5, 10, 15, 20 and 30 years.
PIB is one of such instrument which is free from any type of risk because it is
guaranteed by the Government of Pakistan. For the first time, in year 2000,
Pakistan Investment Bonds were introduced. Earlier bonds issued by the
government were known as Federal Investment Bonds, such bonds were issued
in 1992.State Bank of Pakistan is the main body which formulates the monetary
policy in open market. It includes the operations like T-Bills and Pakistan
Investment Bonds. The prices in open market operations vary from time to time.
(Sindh pension Fund Project, 2007) The average returns are mentioned below:
DETAILS REGARDING RATES OF PAKISTAN INVESTMENT
BONDS
S.NO Name Of Bank Rate Of Return Per
Annum
01 HBL 11.5-11.75 for 30 years
02 UBL 11.5-11.75 for 30 years
03 ABL 11.5-11.75 for 30 years
04 MCB 11.5-11.75 for 30 years
05 NBP 11.5-11.75 for 30 years
(Finance Department documents, 2006-07)
The other options available in equity market are Shares of listed companies and
certain Mutual Funds. The SECP directions provide range of different investment
portfolio which lies between aggressive (equity based) to extreme conservative
i.e. debt based.
- 39 -
RISK RETURN CHARACTERISTICS OF DIFFERENT TENOR PIBS
PIB Tenor
Return
(%)
Risk
(%)
3 YR 6.6807 2.573
5 YR 7.2636 2.2873
10 YR 8.1442 1.9477
15 YR 10.0928 1.0468
20 YR 10.80 0.8938
30 YR 11.6138 0.0389
(Source: Sindh pension Fund Project, 2007)
The amount invested for lager period has better returns as shown below:
RETURNS OF DIFFERENT TENOR PIBS
(Source: Sindh pension Fund Project, 2007)
While investments for shorter periods have less returns as shown in graphs with
high risks
- 40 -
RISK ASSOCIATED WITH DIFFERENT TENOR PIBS
(Source: Sindh pension Fund Project, 2007)
The reading of graphs shows that longer term investments are the best option.
However, as GP fund is created for reducing liabilities of pensioners on yearly
basis, therefore, some amount may be invested for short periods and some
portion for larger periods but most importantly, for GPF the long term investment
is better option and for SSRF short to medium term investment is recommended.
10-YR PIB Return
0.002.004.006.008.00
10.0012.00
1/31
/200
3
3/31
/200
3
5/31
/200
3
7/31
/200
3
9/30
/200
3
11/3
0/20
03
1/31
/200
4
3/31
/200
4
5/31
/200
4
7/31
/200
4
9/30
/200
4
11/3
0/20
04
1/31
/200
5
3/31
/200
5
5/31
/200
5
7/31
/200
5
9/30
/200
5
11/3
0/20
05
1/31
/200
6
3/31
/200
6
5/31
/200
6
7/31
/200
6
9/30
/200
6
11/3
0/20
06
1/31
/200
7
3/31
/200
7
Source: Reuters Pakistan
20-YR PIB Return
- 41 -
0.002.004.006.008.00
10.0012.0014.00
3/7/
2004
5/7/
2004
7/7/
2004
9/7/
2004
11/7
/200
4
1/7/
2005
3/7/
2005
5/7/
2005
7/7/
2005
9/7/
2005
11/7
/200
5
1/7/
2006
3/7/
2006
5/7/
2006
7/7/
2006
9/7/
2006
11/7
/200
6
1/7/
2007
3/7/
2007
Source: Reuters Pakistan
30 –YR PIB Return
11.45
11.50
11.55
11.60
11.65
11.70
Source: Reuters Pakistan
3.2.5 ALLOCATION IN MONEY MARKET
Money market instruments include t-bills and bank deposits. The money market
investment is made equally into 1 month, 2 month, 3 month, 6 month, 9month
and 1 yr T-bills and bank deposits giving returns slightly higher than T-bills.
3.3 INVESTMENT OPTIONS THROUGH T-BILLS RETURNS FROM
2003- 2007
- 42 -
3.3.1 TREASURY BILLS
Treasury Bills (T-Bills) are usually invested for short-term period which is also
known as short-term government securities. These bills are those types of
investments in which the risk is zero because it is guaranteed by Government of
Pakistan. According to statistics the average return from T bills is around 8%.For
the analysis of market; many Primary Dealers were introduced in the year 2001.
The main aim was that there will be more representations of market conditions.
The total number of primary dealers currently is twelve, which includes brokerage
houses and banks. They participate in open market operations conducted by the
State Bank of Pakistan. The calculations are made on daily basis. The graph
represents from year 2002-06.
Return Trends of different T-bills
(Sindh Pension Fund report, 2005 by LUMS)
The size of T-bill markets is around Rs.400 billion. The size of the market is
important and the secondary market is well developed. State Bank of Pakistan is
- 43 -
authorized to conduct open market operations. (Sindh Pension Fund report, 2005
by LUMS)
1 YR T-bill Returns
0.00
2.00
4.00
6.00
8.00
10.00
1/31/2
003
3/31/2
003
5/31/2
003
7/31/2
003
9/30/2
003
11/30
/2003
1/31/2
004
3/31/2
004
5/31/2
004
7/31/2
004
9/30/2
004
11/30
/2004
1/31/2
005
3/31/2
005
5/31/2
005
7/31/2
005
9/30/2
005
11/30
/2005
1/31/2
006
3/31/2
006
5/31/2
006
7/31/2
006
9/30/2
006
11/30
/2006
1/31/2
007
3/31/2
007
Source: Reuters Pakistan
The chart shows that average rate of return is around 9.5%.
3.3.2 TERM DEPOSITS
It is authorized as per law that investment can be made in Term Deposits at local
and foreign banks. This investment is in form of Pak Rupees or in foreign
currency.
However, at this time entire investment is being made in local currency. The
maturity of the invested amount varies from 6 months to one year and there is an
option of renewal as decided by the Board. The Term deposits are currently
paying around 10.23%. This rate has been continuously increasing since 2002
when the rate was only 1%. However, there is more variation in rates of term
deposit than t-bills.
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S.NO Name Of The Bank Interest Rate For
12 Months
01 HBL 11.5%
02 NBP 10.5%
03 Al Habib 10.5%
04 MCB 11.5%
05 CITI 9.4%
06 Standard Chartered 8.7%
07 ABN Amro 8.9%
08 Meezan 10.3%
09 Al Falah 10.5%
10 Al Barka 10.5%
(Source: Finance Department documents, 2006-07)
3.3.3 TFC
Term Finance Certificates which is also known as TFC is a debt instrument
issued by a various listed companies. For their rating Pakistan Credit Rating
Agency (PACRA) is authorized to make policies. In TFC both institutional and
individual investors can purchase term finance certificates. The duration period is
30 to 45 days. These issues do not need prior verification from the SECP. At
present, listed TFCs have a tenor from 5 to 8 year as compared to previous one
which was 3 to 5 years, with volume lies between PKR 1,000 million to PKR
3,000 million. Further, inefficient pricing of TFC instruments itself is a problem in
the primary issuance process. As shown TFCs have a differentiated type of
system, so it is difficult to price where two issues that are rated differently can
cope with the situation. It is therefore, proposed Sindh Government should keep
an eye on return and then make any investment. (SECP Report on Debt Capital
Markets May 2006)
Details of Rates for TDRs Offered by Banks for Period of One Year Investment
- 45 -
S.NO Name Of The Bank Interest Rate For
12 Months
01 HBL 11.5%
02 NBP 10.5%
03 Al Habib 10.5%
04 MCB 11.5%
05 CITI 9.4%
06 Standard Chartered 8.7%
07 ABN Amro 8.9%
08 Meezan 10.3%
09 Al Falah 10.5%
10 Al Barka 10.5%
(Finance Department documents, 2006-07)
The Debt market consisted of long term bonds guaranteed by government which
is known as Pakistan Investment Bonds (PIB) and Corporate Bonds which are
commonly stated Term Finance Certificate (TFC).
The criteria for evaluating debt and money market option was based on historical
returns, historical risk (variation in different times), liquidity, credit worthiness,
market development, market capacity and future outlook.
Since the TFC market can not be cashed, therefore it is in development process
and situation in Stock Market is also not very satisfactory because of financial
crisis, but is a temporary situation, therefore, one can opt for investments in
stocks for some portion of amount. However, new issues could be evaluated into
the portfolio, indebt instruments, Pakistan Investment Bonds of different
maturities have been picked in equal proportion with the funds going into bonds
of all maturities 3, 5, 10, 15 and 20 years. (See Sindh Pension Fund report by
LUMS and SECP guidelines).The reason behind the selection of equal
investment proportions for Government Bonds of different maturities is the need
to meet G.P Fund Liability payments over a long time and cater large number of
downtrodden people through SSRF
- 46 -
There could also be termed as the varying liquidity requirements. Money market
allocation is made similarly in equal proportion in Treasury Bills of all maturities
(3, 6, 9 and 12 months and bank term deposit of 1 year. It’s a money market
instrument offered by brokerage houses whose credit worthiness is questionable;
therefore, these are also discredited. On the equity side, analysis was done on
the sector level. The KSE-100 market is divided into a number of sectors, such
as power generation, commercial banks, insurance to name a few. The sectors
were analyzed based on risk and returns, market capitalization, liquidity and
future outlook.
So, if the investment decision were to be made under SECP guidelines only, then
the conservative portfolio i.e. investment in different sectors is recommended
offering a return of 10% (Approximately).However, with relatively greater
exposure to the equity market, return would be incrementally high to match the
liability growth of 15% . There is the customized portfolio and is highly
recommended. Both the recommendations give higher returns then the Sindh
Government present investments in bank term deposits (9% to 11%) and match
the rate of increase in liabilities. It is a win-win situation. (LUMS, 2007)
Government of Sindh, being a largest employer of Sindh Province is bearing a
huge cost in terms of debt and piling up liabilities of its employees. In this regard,
effective debt management and proper planning is the core issue of fund
management which simultaneously demands improvement of public sector. At
this time, at the Government level, different reforms are being pursued like
financial reform agenda in which effective management of debt and contingent
liabilities have given prime importance but still the problem is not being solved
and other efforts are required. Some good steps on the part of Government are
like expensive Cash Development Loans (CDLS) were prematurely retired
through less costly foreign loans from the World Bank (WB) and Asian
Development Bank (ADB).A lot of savings is being made in debt servicing
through additional allocations. Simultaneously, it also stresses the need for
creation of various Investment Funds and making necessary provisions for their
professional management but still a long way to go. The annual budgetary
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allocation of Rs. 2 billion for GP Fund is not enough to pay off its interest liability
which is Rs. 3.5 billion per year. In this context, investment of available resources
in different sectors is a way to sort out the problem which will not only pay off its
liability but will bore fruitful results. (Finance Department, Budget Analysis Book
2008-09, Government of Sindh and (Standardized Public- Private Partnership
Provision Book, 2007)
CHAPTER 4
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RESEARCH METHODOLOGY
The study of Alternative Profitable Investment of Sindh General Provident Fund
(SGPIF) and Sindh Social Relief Fund (SSRF) is mostly descriptive and
exploratory. The paper is based upon secondary data which is taken from
various books of Finance Department, Accountant General Sindh, and Budget
Volumes of Finance Dept: Finance Accounts Gazettes, various documents and
notifications of Accountant General Sindh, Esta Code Book, Establishment
Division, and Government of Pakistan. A sample of 20 people was taken in
which10 were the heads of different departments of Sindh Government(i.e.
Public Sector) and 10 people were the representatives of various Asset
Management Companies(i.e. Private Sector) who were interviewed about the
better investment options. The discussions were made with heads or responsible
officers of different departments like Finance department, Planning and
Development Department, Fund Management Unit (Finance department) and
Sindh Privatization Commission, National Bank of Pakistan, UBL, ABL and Habib
Bank Ltd. In private sector the representatives included from various Asset
Management Companies like BMA, KASB, NIT and JS bank, AKD, Arif Habib
etc. These representatives were asked a question about alternative potential
area of investment for Sindh General Provident Fund and Sindh Social Relief
Fund. The heads of Government Departments replied that investment in Banks is
not serving the purpose but due to legal constraints investments can not be
made in any other areas. However, the representatives of Private Sector
proposed various sectors like Stocks, NIT and Mutual Funds for better rate of
returns. The discussions included various types of common questions and many
other issues were raised regarding risk factors. After all these discussions, all the
heads were of the view that the laws of Sindh government are vague and very
strict, and because of these tight regulations, the investments are not being
made in many other profitable areas except banks, which according to them, is
not best option to cope with pilling up liability of GP fund because the Sindh
government is getting profits averaging @ 9 to 10%/ annum, while it is paying an
- 49 -
average interest @ 15%/annum. The source of data about Bank rates was taken
from the documents of Sindh Government and the rate of return letters issued by
respective banks. The data on rate of return on Mutual Funds were taken from
the publications of IGI Company. The data regarding profit on NIT was taken
from the website of NIT and NIT documents. The data about rate of returns on
PIBs were taken from the documents of Sindh Government, reports of Sindh
Pension Fund and Rueters. Further, after these discussions it was found that
there is no any clear road map about utilization of SSR Funds in any type of
situation or unfavorable conditions. Besides, all these discussions, the study
further took into account the different books like Standardized Public Private
Partnership, Magazines like JISR, Economist, and Pakistan Economic Survey,
research papers of AERC, annual reports of SPDC and Digital Library of HEC .In
addition, the research report took into account various reports of Public Pension
Funds which adopted in various parts of the world i.e. locally, regionally and
globally in order to get input from other countries and their methodologies of
investments etc. It is seen that different sort of approaches were taken by each
Fund and mode of Investment in Similar type of Fund in Punjab is also mostly in
Banks. The methodology which adopted in this report is based upon three
sections i.e. description of the schemes adopted by Punjab province, regional
countries and different developed countries. After reading all these papers
certain analysis and recommendations are given at the end of the study. The
study also shows Banks while in regional countries like Hong Kong and
developed countries the major portion is invested in Stocks and international
markets. Legally it is not possible to make investments in international markets
but investment in Stocks in Pakistan is possible which must be utilized for short
term investments.
CHAPTER 5
- 50 -
DATA ANALYSIS
The research analysis of data shows that there are various options available to
government of Sindh for investment either for short term, medium term or long
term. The evaluation of data clearly indicates that the rate of return which comes
from investment in Banks and PIBs do not solve the core issue and not even
match the interest rate which the government of Sindh is paying to its employees
i.e.15% while the average rate of return from banks is 9 to 11% in previous years
while in 2007 its average is 10.23% for one year which clearly indicates that
investment should be made in some alternative areas like Stocks, Mutual Funds
and NIT which have high returns for at least meeting the interest rate which is
given to its 40,000 plus employees. The average rate of returns is described
below:
AVERAGE RATE OF RETURNS FROM VARIOUS SECTORS
Average return of PIB for 3 years 6.68%
Average return of PIB for 30 years 11.61%
Average return of National savings per
year
10.56%
Average return of NIT
Per year
13.63%
Average return of Islamic Funds per
year
10.91%
Average return of Multi Assets funds
per year
10.96%
Average return of Banks
10.23%
Rate of Return from stocks 38.41%
(Source: LUMS, 2007 and Government of Sindh Documents, 2008)
- 51 -
S 1
0.00%
50.00%
A v e ra g e ra te o f R e tu rn fro m D iffe re n t S e c to rs
S eries 1
(Source: LUMS, 2007 and Government of Sindh Documents, 2008)
The above clearly indicates that the return from banks and PIBs are not
satisfactory, while rate of return from Mutual Funds, National Savings ,NIT and
most importantly from stocks which is which is 38.41% are the best options for
investments. In addition, the analysis clearly indicates that investment in PIBs
gives least rate of return on three years investments, it gives better results but at
the investment of 30 years which is not a suitable option because a certain
amount is required in liquid form on monthly basis. The rate of return on National
Savings is 10.56% which is better option as compare to Banks and PIBs. The
rate of return from NIT is one of the best options because it yields an average
rate of return which is 13.63 per annum which has least risk and this fund is
guaranteed by Government of Pakistan. The second best option is investment in
Mutual funds which gives a yield around 11%.However, it is clearly shown from
the above table that investment in Banks yields an average rate around 10.23%
on annual basis in 2008, while in year 2007, it was around 9 to 10%.Besides, the
rates are always less whenever an investment is being made for less than one
year tenure. The above table shows that rate of return from stocks is the highest
one which is 38.41% on annual basis. Although investment in stocks has risk
- 52 -
factor also but a certain portion of available funds can be invested in this sector
for better results.
On the basis of above analysis we can easily conclude that the present mode of
investment in TDRs and some portion in PIBs is not a better choice for meeting
liability. So, it is proposed for the Government of Sindh to make future
investments in NIT, Mutual Funds and Stocks which will help a lot in reducing the
liability of Sindh Government and delivery of good service to poor people of
province who are facing so many hardships.
- 53 -
CHAPTE 6
CONCLUSION
There is no denying the fact that the liability of pensioners on Sindh Government
is increasing day by day as the number of employees are increasing. The
prevailing conditions of economic crisis further portray that the general conditions
of the poor people are not satisfactory in the province which is hampering the
growth of economy. This type of situation is demanding immediate efforts for the
welfare of employees and service delivery for good governance. Therefore, to
explore better options and on the basis of historical data, it reveals that the
government of Sindh is paying the interest on GP Fund deduction to its 400,000
plus employees @ 15% (approx:) while the interest which is eared through
investment in banks is around 9 to 10% which clearly indicates that the
government of Sindh is bearing a loss of 5% interest on annual basis. For this
purpose, the establishment of SGPIF and SSRF are good steps in right direction
but it demands for more consistent and concrete efforts from those who are at
the helm, which should range from short term to long term. At present,
Government of Sindh is making consistent efforts for improvement of service
delivery which is highly commendable but the sufferings of poor people are
immense from which no body can offload its responsibilities. This study shows
that investment of available funds in merely banks does not serve the purpose,
therefore, it is suggested that the available funds of SGPIF and SSRF are
invested in NIT and Mutual Funds by considering their high returns. At present
the position of Stock market is not satisfactory, which is a short phenomena (i.e.
exceptional condition) but a right time to invest in Stocks. In my recommendation,
it is strongly proposed that it is high time for investment in Mutual Funds and NIT
through stocks because it will give leverage to the Sindh Government to reap the
- 54 -
maximum benefits at the least cost. If this opportunity is being availed then the
major problem of employees could be addressed to a great extent.
- 55 -
CHAPTER 7
RECOMMENDATIONS
After evaluating the various investment options and keeping in view the threat of
risk that a G.P fund should be invested in those areas in which we could earn
higher returns at the least risk. By keeping legal constraints, one can not go
beyond the scope of statutory restraints. Therefore, the investment should
always be ranged between mid terms to long term by keeping monthly
requirements of pensioners in mind. Conservative and balanced portfolio
investments are best options but conservative investment (TDRs) has low returns
which diluted its importance while balanced investment like NIT is one of the best
options for higher returns which not fulfill the needs of pensioners but will also
give a sound service to employees. The aggressive investment in mutual funds
has good returns but having the high risks also, therefore this option is also
recommended for some portion of available funds.
In this regard it is recommended that the Government of sindh should contribute
into G.P fund on a yearly basis or biannually in order to help the poor pensioners
and vulnerable people of province. It is also suggested that a comprehensive
system of contribution which is deducted from the salaries of employees be
properly used and robust contribution be insured. In view of current situation it is
proposed that G.P and SSRF’s investment be made in various profitable areas
as like Pakistan Investment Bonds, Stock Exchange, Money Market, Financial
sector. Secondly, some room may be created through law and some relaxation
may be provided for investment of funds into Real Estate, Industrial Sector, and
Construction Sector because of their high rate of returns in order to meet the
piled up liability of G.P Fund. Thirdly, through SSRF self employment schemes
may be initiated in order to keep people out from vicious cycle of poverty. The
women constitutes the 52% of the population, for those training centers are
established in rural areas with monthly stipend, their homes be constructed near
their centers for continues availability. The sincere and timely efforts will definitely
bring a positive change in life of the people in this province. Some specific
recommendations are as follows.
- 56 -
1. The input of SGPIF should be increased (at least double) so that the liability
of pensioners could easily be met and the Sindh province should kept out trap
from the trap of interest which is around 15%.
2. The annual allocation of SSRF should be increased at least three times
because the province is reeling under so many problems and poor people
have neither employment opportunities nor other sources of revenue.
3. The Law should be modified in such a way that some room may be given
for investment in stocks.
4. There are many other areas like Real Estate and Industrial sector on which
investment could be made for long periods because of their higher returns,
therefore, some relaxation through law may also be provided.
5. At present the road map for investment of SSRF is not clearly defined and
the definition of poor people is also very subjective, therefore, proper
definition of Vulnerable people may clearly be chalked out and a vibrant line
of action be designed for coping with any unfavorable eventuality.
6. The self employment schemes should be created for those people who
have no means to earn and providing them a fair chance of survival and
growth.
7.On the basis of study and keeping past trends into the mind it is proposed
that 20% 0f available funds are invested in Banks( TDRs) in order to keep
money liquid payment to the employees on monthly basis and 30% are
invested into Mutual funds because they have the good rate of returns
which is around 11% some special products it is even higher.The 10% of
available funds should be invested in Stocks, it has the highest rate of
return(although it has risk but still it is a good option as followed by other
countries also).The 40% of available funds are invested into NIT which is
a very good option, having excellent rate of return followed by guarantee
provided by Government of Pakistan.
.
- 57 -
8. The final recommendations are including an investment policy and
allocation strategy based upon good returns along with service delivery
in GP fund and SSRF as well as creation of new avenues for poor people
of the society. Ultimately, investment options are recommended with best
way of investment of Rs.4 billion of Sindh government’s GP fund and 11.6
billion of SSRF.
- 58 -
BIBLIOGRAPHY
Account General Sindh (2004-05) Finance accounts Financial Year
Deacons (2007) Hong Kong, Recent Amendments to the mandatory Provident
Fund Schemes (general)
Establishment Division (2008), Esta Code, Government of Pakistan
Finance dept: (2007-08) Budget analysis Book Government of Sindh
Finance Department (2006-07), Budget book, Government of Sindh, volume # 01
Finance Department (2006-07), Budget book, Government of Sindh, volume # 03
Finance Department (2006-07), Budget book, Government of Sindh, volume # 04
to 07
Government of Sindh, Finance Department Documents
Government of Sindh, (2001), The Civil Servants Pension Rules 1963 with
modifications 1986-87 and 2001
Government of Sindh (2004-05), Re-appropriation Budget Account
Government of Sindh (2005-06), Statement showing BPS wise position of
Provincial Posts and districts combine
Government of Sindh (2005-06), Statement showing BPS wise position of
Provincial Posts
- 59 -
Government of Sindh (2005-06), Appropriation Accounts
Government of Sindh, C.S.R Rules, Volume I & II
LUMS (2007), Pension Fund Project, Sindh Government
Manual Banking Laws
May-2007, Standardized Public-Private Partnership Provisions Book
Punjab General provident Investment Fund Ordinance, 2007
Reily, Frank and Norton, Edgar A.(1999), Investments, Dryden Press
Statement showing the BPS wise position of posts Provincial and District
(combine) as per volume III year 2006-07
Strum, Andreas and Badde, Micheal (2001) Socially Responsible Investment by
Pension Funds
Statement (1971-2007) showing the figure of G.P. Fund
Statement (1995 to 2007) showing figures of pension amount
SECP report (May 2006), debt capital Markets, /SECP Guidelines for
investments
.
Shah, M ALI (2003), transformation of Public Sector entities, speech made on
19th June 2003
- 60 -
Akhter, Shamshad, Pakistan-Banking Sector Reforms: performances and
challenges
The United Nations Environment Program Finance initiative, Asset management
working group and UK Social Investment Forum (2007), Sustainable Pensions
Project
SECP Report (May 2006), Debt Capital Markets
IMPORTANT WEBSITES
www.fdsindh.gov.pk
www.privatizationcommision.gov.pk
www.pddept.gov.pk
www.itdept.gov.pk
www.secp.gov.pk
www.savings.gov.pk
www.adb.com
www.dsp.gov.pk
www.sdssp.gov.pk
http://www.aria.gov.au
ww.savings.gov.pk
http://www.gpf.or.th
www.nit.gov.pk
APPENDIX
Appendix : A
SECP Guidelines
Appendix: B
SGPIF Ordinance
Appendix: C
SSRF Ordinance D
- 61 -
- 62 -
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