Pension Plans

Pension benefits addresses three Certainties of life

  • Taxes
  • Retirement
  • Death

Are you ready for retirement?

Why save for Retirement?

  • Maintain lifestyle
  • Fulfill dreams
  • Protect health
  • Leave a legacy

Retirement Planning

420 salaries Retirement planning spans 35 years of employment or thereabout to cover fron age 25 years old to 60 years; retirement age.

Around 360 payments during 30 years of retirement to cover from age 60 to 90 years or thereabout.

Introduction – Retirement Benefits Arrangement

An Overview

What are retirement benefits schemes?

• Savings plan set up during the active working lifetime of an employee geared towards providing post retirement financial security to the members;

• The Income may be in the form of a cash lump sum after retirement or a pension payable at regular intervals (usually monthly);

Benefits Design

Provident Scheme
Pays Lump sum amount at retirement Read more……..

Defined Benefit Scheme
Benefits are defined on the onset Read more……..

Pension Scheme Pays regular benefits until death Read more……..

Defined Contribution Scheme
Contributions are defined on the onset. Benefits depend on the accumulated contributions plus income thereon Read more……..

Retirement Savings Vehicles
Mandatory National – National Social Security Fund
This is a mandatory public contributory scheme run by the government

Individual Contributory Open Schemes

Voluntary
Private
Occupational

Deposit administration Schemes

The DA business is essentially an investment with annual guarantees. Currently we have guarantees on capitalized bonuses and guarantee on minimum interest (at 4%)

The Bonus declaration is added to the liabilities of each fund.

Occupational Schemes

Stand Alone scheme set-up by employer for employees
Read more……..

Umbrella Scheme

Set-up by Sponsors like APA to reduce the cost of setting up a standalone scheme
Read more……..

Individual Pension Plan
(IPP & GIPP)

Set-up by Sponsors like APA for individuals who wish to save for retirement

Read more……..

Scheme Registration

Registration by the Retirement Benefits Authority

– Mandatory as provided for under the Retirement Benefits Act

– Tenable only if the scheme is established under an irrevocable trust;

– Trust Deed and Rules complies with the provisions of the Retirement Benefits Act

Registration by the Kenya Revenue Authority

– Optional but necessary to take advantage of tax Benefits

– Registration with the RBA is a prerequisite

– Trust Deed and Rules complies with the provisions of the Income Tax Act and the attaching Income Tax Rules

Modes of Exit

  • Withdrawals
  • Resignation
  • Termination
  • Redundancy
  • Transfers
  • Immigration
  • Retirement
  • Ill –Health retirement Early Retirement Normal Retirement
  • Late Retirement
  • Death

    Core Benefits

  • Death
  • Disability
  • Retirement Withdrawal

    Benefits Payments:

    Resignation, dismissal, retrenchment/ before attainment of early retirement age i.e. 50 Yrs. 100% Employees contribution + 50% Employer Contribution

    NB: 50% of Employers contribution is held to retirement:

    Member’s Choice:

    1.Transfer to an Individual Pension Plan
    2.Transfer to next employers Scheme
    3.Leave the fund in the scheme

    Benefits – Disability/ill health

    Lump sum 100% Employee benefits + 100% Employers benefits + AVC Required

    – Letter from Registered Doctor Indicating you can no longer engage in active employment

    – Letter of Approval from employer

    Benefits – Retirement

    Early Retirement, Normal Retirement and Late Retirement:

    Option 1 : 1/3 Lump sum + 2/3 paid as a pension

    Option 2 : Total benefit paid as lump sum

    Option 3 : Total benefits funds a pension Pension

    •Aims to replace the income lost after retirement.
    •Payable for a guaranteed period of 0, 5, 10 or 15 years

    Benefits – Death

    Lump sum paid to your beneficiaries 100% of Benefits (Employee Conts + Employer Conts + AVC)

    •Fill in a beneficiary Nomination form

    •Pension Benefits do not form part of your estate

    •Trustees will nominate your beneficiaries, when no forms