Investor Education : Atlas Funds Nurturing Your Investment

Participant must submit the Early Redemption Form to Atlas Asset Management Limited (AAML) for an early withdrawal to take place. This should be accompanied by documentary evidence for the taxable income and tax paid by the Participant for the last three years to enable the AAML to determine the average tax rate which is required to be deducted.
The Units in the Sub-Funds shall be redeemed at the Net Asset Value at the close of the Dealing Day on which the request, complete in all respects, is received. The amount due shall be credited to the Individual Pension Account, from which the redemption payment shall be made after deducting the applicable tax, as required.
The withdrawals may be through single or multiple payments. Incase of partial withdrawals, Sub-Fund Units shall be redeemed on pro rata basis ensuring that he remaining Units are in accordance with the Allocation Scheme last selected by the Participant.
The redemption amount shall be paid by direct transfer to the Participant’s designated bank account or a crossed cheque / draft for the amount will be dispatched to the registered address of the Participant.

In the unfortunate event of the death of a Participant , the nominees (as identified by the Nomination Form) shall be the only persons recognized as having any title to or interest in the balance held in Individual Pension Account of the deceased. In case no nominations have been made, the executors, administrators or succession certificate holders of the deceased Participant shall be the only persons recognized as having title to the accumulated balance of Individual Pension Account of the deceased Participant.

Following are the options available to the nominees:

Withdraw his/her share of the amount subject to the conditions laid down in the Income Tax Ordinance; 2001 (XLIX of 2001);
Transfer his/her share of the amount into his existing or new Individual Pension Account to be opened with the pension fund manager, according to the Voluntary Pension System (VPS) Rules;
Use his/her share of the amount to purchase an Approved Annuity Plan on his/her life from a Life Insurance Company, only if the age of the survivor is fifty five years or more; or
Use his/her share of the amount to purchase a deferred Approved Annuity Plan on his life from a Life Insurance Company to commence at age fifty five years or later.

If any amount in excess of the allowable amount is withdrawn as cash by the nominees, then tax will be deducted before making any such payments.

The Units shall be redeemed on the Dealing Day on which the intimation of death of the Participant is received in writing and transferred to the Individual Pension Account of the deceased.
Each of the nominees as nominated in the Nomination Form shall be required to submit Early Redemption Form to Atlas Asset Management Limited (AAML). The total amount in the Individual Pension Account of the deceased participant shall be divided among the nominated survivor(s) according to the percentages specified in the Nominations Form.

Insurance Coverage to the Participants of Atlas Pension Fund (APF):
Atlas Asset Management Limited (AAML) as the Pension Fund Manager provides free 24 hours a day world wide accidental death and disability coverage through New Jubilee Life Insurance Company Limited to all the Participants of Atlas Pension Fund (APF) up to the age of 60 years. This insurance coverage shall only be available for as long as the Participant contributes to APF.
The Participant shall not be required to undergo medical examination for insurance coverage laid in the policy.

Takaful Coverage to the Participants of Atlas Pension Islamic Fund (APIF):
Atlas Asset Management Limited (AAML) as the Pension Fund Manager provides free accidental death, terminal illness benefits and all the other supplementary benefits through the takaful products and services of Pak-Qatar Family Takaful Limited (PQFTL) to all the Participants of Atlas Pension Islamic Fund (APIF) up to the age of 60 years. This insurance coverage shall only be available for as long as the Participant contributes to APIF.

The actual sum assured offered to the Participants shall be up to 100 times the monthly contribution to the APF subject to a maximum of Rs. 4,000,000 in the event of death and full disability and range between 1 to 90 times the monthly contributions in the event of partial disability, subject to the maximum of Rs. 4,000,000.

Yes. Atlas Asset Management Limited also offers the following three optional insurance coverage schemes, which will be available world wide 24 hours a day, in collaboration with New Jubilee Life Insurance Company Limited to all Participants who have opted for APF up to the age of 60 years at an affordable price. The policies will be available on yearly basis.

Life Insurance
Critical Illness
Accidental Hospitalization

The Participant shall not be required to undergo medical examination for insurance coverage laid in the policy.

Note:
For premium rates, terms and conditions and other details, please refer to the Insurance Coverage Leaflet which will be available on request.

Contributions made by a Participant in Atlas Pension fund (APF) and Atlas Pension Islamic Fund (APIF) in any one tax year, shall be entitled to a tax credit under Section 63 of the Income Tax ordinance 2001.
The amount of tax credit in any one tax year shall be calculated according to the following formula:

(A/B) x C Where:

Is the amount of tax assessed to the person for the tax year, before allowance of any tax credit under this part;
Is the person’s taxable income for the tax year;
Is the lesser of:

the total contribution or premium paid by the person in the year; or
Twenty percent of the eligible person’s taxable income for the relevant tax year; provided that an eligible person joining the scheme at the age of forty one years or above, during the first ten years starting from July 01, 2006 shall be allowed additional contribution of 2% p.a. for each year of age exceeding forty years. Provided further that the total contributions allowed to such persons shall not exceed 50% of the total taxable income of the preceding year; or
Five hundred thousand rupees

Tax credit illustration for salaried class Participants

During any one tax year	Scenario I	Scenario II	Scenario III	Scenario IV
Gross Taxable Income from Salary	600,000	600,000	4,000,000	4,000,000
Amount contributed in Atlas Pension Fund	@ 12.5%	@ 20%	@ 12.5%	@ 20%
Amount contributed in Atlas Pension Fund	75,000	120,000	500,000	800,000
Maximum ceiling of Contribution for tax credit purposes	Contribution Amount	@ 20%	Max. Amount	Max. Amount
Maximum ceiling of Contribution for tax credit purposes	75,000	120,000	500,000	500,000
Tax Payable* for the Year before Tax Credit under Section 63	@ 4.5%	@ 4.5%	@ 18.5%	@ 18.5%
	27,000	27,000	740,000	740,000
Tax Credit on Contributions	3,375	5,400	92,500	92,500
Net Tax Payable for the Year	23,625	21,600	647,500	647,500
* The tax rate shall apply as per the respective tax slab of each Participant

Tax credit illustration for self employed Participants

During any one tax year	Scenario I	Scenario II	Scenario III	Scenario IV
Gross Taxable Income from Business & Profession	600,000	600,000	4,000,000	4,000,000
Amount contributed in Atlas Pension Fund	@ 12.5%	@ 20%	@ 12.5%	@ 20%
Amount contributed in Atlas Pension Fund	75,000	120,000	500,000	800,000
Maximum ceiling of Contribution for tax credit purposes	Contribution Amount	@ 20%	Max. Amount	Max. Amount
Maximum ceiling of Contribution for tax credit purposes	75,000	120,000	500,000	500,000
Tax Payable* for the Year before Tax Credit under Section 63	@ 12.5%	@ 12.5%	@ 25%	@ 25%
	75,000	75,000	1,000,000	1,000,000
Tax Credit on Contributions	9,375	15,000	125,000	125,000
Net Tax Payable for the Year	65,625	60,000	875,000	875,000
* The tax rate shall apply as per the respective tax slab of each Participant

An employee (who is a Participant in APF) may provide documentary evidence of Contributions made during each tax year ending on June 30 to his/her employer who may then under Section 149 (1) make adjustments of tax credit admissible under Section 63 from the tax to be deducted under the head ‘salary’. The employee may claim a tax rebate as per the above illustration (A), depending upon the quantum of the Contributions made during that tax year and the applicable slab of that Participant.

A self-employed Participant may claim the tax credit at the time of filing of his/her Return of total income for each tax year ending on June 30. In the computation of his/her total taxable income and tax payable, the Participant may claim a tax rebate as per the above illustration (1)(B), depending upon the quantum of the Contributions made during that tax year and the applicable slab of that Participant.

The Pension Fund Manager shall send on or before 31st July each year a certificate of Contribution made to the Atlas Pension Fund (APF) and Atlas Pension Islamic Fund (APIF) for the previous year ended June 30. The Pension Fund Manager shall also send, before June 30, statement of accounts, as may be required by the employer of the Participant, confirming payment by the Participant to the APF and APIF under Sections 63 and 149(1) of the Income Tax Ordinance, 2001.

For an employer, the contributions in to the APF & APIF on behalf of its employees, is a tax deductible charge, i.e. that the amount of Contribution made by the employer will qualify as expense for tax purposes whilst calculating the taxable income of the employer. When computing the “income from business”, the employer is allowed a deduction for the amount contributed to the Atlas Pension Fund (APF) and Atlas Pension Islamic Fund (APIF) on behalf of its employees as APF and APIF is an Approved Pension Fund as defined under clause 3(c) of the Definitions of the Income Tax Ordinance, 2001.

At retirement, the Participant shall be entitled to receive:

Up to 25% of the accumulated balance of his/her Individual Pension Account tax free; and
The tax shall not to be deducted in case the remaining 75% of the accumulated balance in the Participant’s Individual Pension Account is:

Invested in an Approved Income Payment Plan of a pension fund manager;
Paid to a life insurance company for the purchase of an Approved Annuity Plan; or
Transfer of the amount to other Pension Fund manger for purchase of Approved Income Payment plan.

Any amount withdrawn in excess of 25% of the accumulated balanced as lump sum would be subject to tax.

Yes, the payments from the Approved Income Payment Plan or Approved Annuity Plan would be subject to tax deductions as per the provisions of the Income Tax Ordinance, 2001.

In the event that amount is withdrawn from the Atlas Pension Fund (APF) and Atlas Pension Islamic Fund (APIF) before retirement, or the lump sum amount withdrawn at retirement is more than the allowed amount (i.e. the amount exceeds 25% of the accumulated balance), then the Pension Fund Manager whilst making payment from Individual Pension Account shall be required to deduct tax at the rate specified in Section 12 (6) of the Income Tax Ordinance, 2001 from any amount:

Withdrawn before the retirement age.
Withdrawn, if in excess of 25 per cent of his accumulated balance, at or after the retirement age.

Tax Rate applicable as provided in Section 12 (6) shall be computed in accordance with the following formula:
A / B % Where:
A is the total tax paid or payable by the person on the person’s total taxable income for the three preceding tax years; and
B is the person’s total taxable income for the three preceding tax years.

The fee structure is as follows:

Front End Fee:   A front end fee of 3% of the contribution shall be deducted by the Pension Fund Manager from the contributions made into the fund.
Annual Management Fee:   Annual Management Fee shall be charged by the Pension Fund Manager. This fee shall be 1.50% p.a. of the fund value, charged on a daily basis.
Trustee Fee:   Trustee is entitled to a monthly remuneration which is charged to the Sub-Funds and is calculated as follows:

Net Assets (Rupees)		Tariff
From	To	Tariff
1	1 billion	Rs. 0.3 million or 0.15% p.a. of Net Assets, which ever is higher
Above 1 billion	3 billion	Rs. 1.5 million plus 0.10% p.a. of Net Assets, on amount exceeding Rs. 1 billion
Above 3 billion	6 billion	Rs. 3.5 million plus 0.08% p.a. of Net Assets, on amount exceeding Rs. 3 billion
Above 6 billion	-	Rs. 5.9 million plus 0.06% p.a. of Net Assets, on amount exceeding Rs. 6 billion

Other Fees & Charges: Other Fees and Charges that are borne by the Sub-Funds include:

a	Brokerage and Transaction cost(s)
b	Legal costs,
c	Routine operational bank charges
d	Financial costs related to borrowing
e	External Auditor’s fee
f	Commission’s annual fee
g	Taxes applicable to the Trust on its income, turnover, assets or otherwise if any;
h	Custodial charges including Central Depository Company of Pakistan charges, if any

No fee/ front-end fee shall be charged on such transfers.

Atlas Pensions are beneficial not only for Participants (as explained earlier) but also for the employers because of the following:

Minimal administration at the end of the employer: The employer is freed from the hassle of managing and maintaining the front office (investments) as well as the back office (book keeping) pertaining to their employees provident fund.

Paternal responsibility: Looking after employees’ benefits/well being is the employers’ fiduciary responsibility.

Inherent advantages of a Defined Contribution System: As Atlas Pensions are based on defined Contribution plan, they enjoy inherent advantages of the defined contribution system. Hence, the employer is freed from the associated risks of a Defined Benefit Plan.

Following is a comparison between Atlas Pensions and Provident Funds;

	Atlas Pensions	Provident Funds
1	Employee can avail a tax credit up to Rs. 100,000 per annum. The tax credit is directly adjusted in monthly salary thereby increasing monthly cash flows.	Tax credit is not available on employees’ contribution to PF. However, the employer contribution to PF is not added to the income of the employees.
2	In APF, there is free world wide accidental death and disability insurance coverage up to Rs. 4,000,000. It is ideal for employees working in the industrial sector. *	There is no insurance in PF; the employee just depends on the group insurance scheme of the company.
3	Each employee has an independent pension account which has an asset allocation as per his/her risk profile and investment horizon.	There is no separate asset allocation for an employee in PF.
4	APF is portable and an employee can continue his Individual pension account while switching from one job to another.	The PF account of an employee finishes off at the time of switching his/her job and he/she has to make a fresh start in terms of savings.
5	An employee can choose between the pension fund managers if he/she is not satisfied with the performance of the fund manager. There is no additional cost associated with such a transfer.	If the employee feels that the firm’s provident fund is not growing in line with his/her expectations, he/she has no choice but to hope for the best.
6	Atlas Pension is managed by professional fund managers.	Provident funds are generally not professionally managed.

AAML has published two brochures, one on Atlas Pension Fund and other on Atlas Pension Islamic Fund, giving details of the schemes, which are available on web-site. In addition the offering documents of the above funds and financial statements are also available on web-site for review. Should you have questions, we shall be pleased to reply it. If we find that your questions are of general interest to investors, we will also include in the FAQs.


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