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Page 1: Long Report of GP Fund

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Page 2: Long Report of GP Fund

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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Page 3: Long Report of GP Fund

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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Page 4: Long Report of GP Fund

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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Page 5: Long Report of GP Fund

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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Page 6: Long Report of GP Fund

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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Page 7: Long Report of GP Fund

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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Page 8: Long Report of GP Fund

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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Page 9: Long Report of GP Fund

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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Page 10: Long Report of GP Fund

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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Page 11: Long Report of GP Fund

(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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Page 12: Long Report of GP Fund

(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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Page 13: Long Report of GP Fund

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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Page 14: Long Report of GP Fund

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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Page 15: Long Report of GP Fund

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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Page 16: Long Report of GP Fund

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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Page 17: Long Report of GP Fund

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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Page 18: Long Report of GP Fund

Age Bracket and Annual Salary

Sourc( Pakistan Social and Living Standards Measurement Survey,CWIQ2004-

05)

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Page 19: Long Report of GP Fund

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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Page 20: Long Report of GP Fund

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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Page 21: Long Report of GP Fund

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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Page 22: Long Report of GP Fund

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%

Page 23: Long Report of GP Fund

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 -

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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.

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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

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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

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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.

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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

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Page 30: Long Report of GP Fund

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)

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Page 31: Long Report of GP Fund

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

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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

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Page 33: Long Report of GP Fund

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.

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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)

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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 -

Page 36: Long Report of GP Fund

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.

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Page 37: Long Report of GP Fund

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%

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Page 38: Long Report of GP Fund

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.

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Page 39: Long Report of GP Fund

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).

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Page 40: Long Report of GP Fund

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.

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Page 41: Long Report of GP Fund

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

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Page 42: Long Report of GP Fund

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 -

Page 43: Long Report of GP Fund

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

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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

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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

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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%

(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

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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

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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

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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)

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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

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Page 54: Long Report of GP Fund

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.

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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

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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.

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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.

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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.

.

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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.

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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 -

Page 61: Long Report of GP Fund

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

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Page 62: Long Report of GP Fund

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

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