KIPCO said in a statement it has signed a memorandum of understanding with Munich Re, one of the world's leading insurers, to provide the new company with technical services and training.
"Taka'Ud Savings & Pensions will be incorporated in Bahrain and aims to launch its initial product range in selected MENA countries by the Middle of 2010," KIPCO said in a statement.
KIPCO said it believes there is a "large and unmet demand throughout the MENA region for low-risk, long-term pension products with secure and reasonable returns."
United Nations statistics show that the number of people aged over 65 in the region will increase to 32 million by 2030, from an estimated 10.6 million in 2000, KIPCO said.
KIPCO's vice chairman, Faisal Al-Ayyar, said funding retirement for a growing number of people has proven to be an "enormous challenge" even for the richest countries in the region.
Companies like Taka'Ud Savings & Pensions would "support the efforts of regional governments as they encourage working people to take more personal responsibility for their retirement funding," Ayyar said.
They would also "allow government pension schemes to focus on the needs of the less affluent segments of their societies."
The statement did not offer any financial details about the Bahrain-based company, but it told Reuters last year it planned to sell pension products with up to $500 million in the Middle East over the next five years.
KIPCO is Kuwait's biggest investment firm. It owns stakes in 50 companies and operates in 21 countries.