COMPANY PROFILE
Britam is a diversified financial services group, listed on the Nairobi Securities Exchange. The group has interests across the Eastern and Southern Africa region, with offices in Kenya, Uganda, Tanzania, Rwanda, South Sudan, Mozambique and Malawi. The group offers a wide range of financial products and services in Insurance, Asset management, Banking and Property. The product range includes: life, health and general insurance, pensions, unit trusts, investment planning, wealth management, off- shore investments, retirement planning, discretionary portfolio management, Property development and private Equity.
Our Value Proposition.
Whether you are a big corporate, medium sized organization or an SME, we have a solution for you. A solution that will enable your organization to comply with the NSSF Act 2013 regulatory requirements as well as add value to the most important resource in your organization: Your People.
Britam is currently running two types of guaranteed retirement schemes that you can choose from:
1. Occupational or Stand Alone Scheme
2. Umbrella Retirement Scheme
The Britam Umbrella Retirement Plan
The Britam Umbrella Scheme was registered in 2006, as a first in the industry. The scheme provides a convenient solution to organizations that find setting up a stand- alone retirement scheme and continuously complying with the complex legal and statutory requirements a challenge in both monetary and human resource cost.
This enables the participating employer and the members of the scheme ethe scheme to experience service from a leading insurance company in terms of superior customer service and growth of the envisaged retirement benefits as they put their focus on their core business.
Key Features and Benefits of Britam Umbrella Scheme
- It is Hassle Free for the Employer: This scheme completely frees the employer from the hassles of establishing and overseeing the running of the scheme. It does this by providing an all rounded package which offers full Administration, Custodian and Investment Services. This include:
- Installation and maintenance of member and beneficiary records
- Contributions and fund balance records
- Processing of Withdrawals
- Death or Retirement Benefits
- Member Education Service
- Filing of on-going compliance records to RBA and KRA
- Facilitating members’ attendance of Annual General Meetings
- Issuance of member fund statements & scheme statements to the employer
- Custody of retirement savings and prudent investment of the same which includes a 100% guarantee of the accumulated value
- Full Administration, Custodian and Investment Service which includes: Installation and maintenance of member and beneficiary records, contribution and fund balance records, processing of withdrawal, death or retirement benefits, member education service, filing of ongoing compliance records to RBA and KRA, arranging for the members to attend an annual member’s meeting, issuance of member fund statements and scheme statement to the employer, custody of retirement savings and prudent investment of the same including 100% guarantee of the accumulated value.
2. Immediate Access to Tax Relief Benefits: Individuals who join the Fund gain immediate access to all the tax privileges of a registered retirement scheme which includes:
Cost Optimization: A key pillar of the Britam Umbrella scheme is to cut down expenses and thereby maximize the monetary benefits for the members. To achieve this, the scheme pools funds from several participating institutions to draw from economies of scale. Due to the savings thus attained, Britam, as the scheme sponsor, reduces the associated costs of managing the scheme. As a result, the following charges are waived:
- Administration fee
- Annual audit fee
Fund Guarantees
- Guarantee on Capital: This is made up of the regular contributions (employer & employee) plus the prior years’ declared and credited interest.
- Minimum guaranteed interest rate of 5% for the first three years.
Competitive Fund Performance
The investment philosophy underpinning the scheme is to deliver high returns at minimum exposure of members’ funds to unmitigated risks. The 10-year average net return on funds in the scheme is 9.9%.
| 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 |
| 16% | 16% | 8% | 8.5% | 10% | 6.0% | 10% | 6% | 10% | 8.5% |
Post-retirement Medical Fund Option
- This provides members of the scheme with a vehicle to save and invest towards growing a fund to cater for their health needs after retirement.
- The member, sponsor or both can make contributions to the post-retirement medical fund.
- The contributions to the medical fund shall be treated as “Additional Voluntary Contributions” for income tax purposes and for Retirement Benefit Regulations purposes.
Service Standards
- All our processes are fully automated thereby ensuring member data integrity.
- Interest is credited into the members’ accounts on a daily basis from the date of receipt of contributions and thereby enjoying compounding effect over the years.
- We settle fully documented claims within ten (10) working days directly into the member’s account.
- Covenient access to My Britam Self-Service Portal for members of the scheme.
Value Addition Services and Products
- Annual statements provided to members of the scheme. Provisional statements are also available quarterly.
- Free annual member education on benefits available to them as well as any as well as any other prevailing market and regulatory updates.
- Availability of end-to-end health solutions. These include Post-retirement Medical Savings plan as well as Post-retirement Insurance Products for life.
- Free member education on retirement planning.
- Delegation of the role of trusteeship to a professional regulated corporate trustee at no additional cost.
The NSSF Act 2013
Contributions Model
The Act requires employers to make mandatory contributions to the National Social Security Fund. The contribution rates are 6% of pensionable earnings from the employer and an equal contribution from the employees.
The contributions have been split into two levels.
- Tier 1 contribution is based on the Lower Earning Limit capped at Ksh. 6,000.00 of the employee’s pensionable income. The maximum amount of money to be deducted is Ksh. 720. This amount must be paid to NSSF.
- Tier 2 contribution is pegged on the balance of income between the Lower Earning Limit and the Upper Earning Limit capped at Ksh.18,000 of pensionable income at the rate of 6% for the employer and a similar percentage from the employee.
Note: The above contribution matrix is for the first year of implementation.
Contracting out Process
- Britam has applied to the Retirement Benefits Authority (RBA) to have the Britam Umbrella Pension Fund approved to receive Tier 2 contributions from employers.
- On approval, RBA will issue Britam with a Reference Scheme Certificate (RSC) for the Fund, a copy of which will be availed to you to enable you apply to RBA to contract out of NSSF for Tier 2 contributions.
- RBA will issue you with a Contracting Out Certificate (COC). This effectively means that some Tier 2 contributions might initially go to NSSF before the contracting out certificate is obtained from RBA.
- A Written application must be made to the Retirements Benefit Authority (RBA) giving at least 60 days’ notice by filling out form C1
Why contract out NSSF TIER 2 contributions?
Superior Returns
- Britam has been declaring competitive returns in the market with a minimum guaranteed rate of return being 5%.
Professional Management of Funds
- Britam’s fund is run by a team of highly skilled, qualified and experienced personnel who handle the day to day administration of funds as well as investment of funds.
Service Standards
- High level service standards. An adherence to high level standards .including access to My Britam Self-Service Portal to make it convenient for each member to monitor growth of their fund.
Diversification of Risks
- Spreading of risk between the public and private sectors will enable the members to get the best of both options as they exercise their right to make an informed choice regarding where to invest their retirement benefits.
Benefit Settlement
- Prompt settlement of pension benefits and ease of transfer to Post Retirement Plans
Please note that as your Pension provider, we will work closely with you at all stages to ensure compliance with the new regulation in an administratively efficient manner which will in turn lead to a smooth transition to the new arrangement.
We would be most grateful for an opportunity to serve your organization as your preferred partner in the provision of Staff Retirement Benefits.
We look forward to hearing from you soon on the next steps towards setting up the retirement plan for the members of your staff.
THE NATIONAL SOCIAL SECURITY FUND ACT 2013 OVERVIEW
The National Social Security Fund (NSSF) Act 2013 was enacted on 24th December 2013. The implementation of the enhanced contributions is effective immediately.
RATE OF CONTRIBUTIONS
The Act prescribes a 12% of pensionable income as the rate of contribution on a graduated scale referred to as Tiers 1 and 2.
Tier 1 contributions must be remitted to NSSF whereas Tier 2 contributions may be remitted to NSSF or to a private pension scheme approved by the Retirement Benefits Authority. The maximum monthly Tier 1 contribution is Ksh. 720 and Ksh. 1, 440 for Tier 2 in the first year of implementation. This is set to change in subsequent years based on Average National Income statistics.
CONTRACTING OUT
The Act allows employers the option of paying out their Tier 2 contributions to a private pension scheme through a contracting out process. As an employer, you will need to consider the following:
- How to treat Tier 2 contribution: whether to contract out or pay to NSSF
- If to contract out, apply for approval by the Retirement Benefits Authority. This is done via a simplified form, Form C1
- Once approved to Contract-Out, you shall then apply to have your Tier 2 contributions already remitted to NSSF to be paid back to the Scheme
BRITAM EMPLOYEE RETIREMENT SOLUTIONS
Britam has been declaring competitive returns in the market with a minimum guaranteed rate of return of 5%.
1. Professional Management of Funds
Britam’s fund is run by a team of highly skilled, qualified and experienced personnel who handle the day to day administration and investment of funds.
2. Service Standards
We adhere to a high level of service standards which includes access to My Britam Self-Service Portal where they can conveniently monitor the growth of their fund.
3. Diversification of Risks
Spreading of risk between the public and private sectors will ensure that our members get the best of both options as they exercise their right to make an informed choice on where to invest their retirement benefits.
4. Benefit Settlement
We ensure p rompt settlement of pension benefits and ease of transfer to Post Retirement Plans and products.
1. What is the nssf act of 2013?
The National Social Security Fund (NSSF) Act 2013 was introduced on 24th December 2013. However, this was not fully implemented as the High Court suspended a number of provisions including Section 20 touching on contributions to NSSF.
Subsequently, this position was appealed and, in its judgement dated 3rd February 2023, the Court of Appeal set aside the judgment of the Employment and Labor Relations Court delivered on 19th September 2022 in its entirety. Therefore, this means that the NSSF Act 2013 is now constitutional and the State can proceed to enforce this Act which repeals the previous NSSF Act of 1965.
2. What is the Impact of this Act?
Both employers and employees will be required to increase contributions from Kshs. 200 per month to 6% of pensionable salary (subject to certain salary maximums). The Act prescribes contributions to NSSF to be on a graduated scale referred to as Tiers.
3. What are these tiers and how is the Calculation done?
Tier 1 Contributions are calculated as 6% of an employee’s pensionable earnings up to a maximum called the LOWER EARNINGS LIMIT (L.E.L) currently capped at a maximum of KES 6,000 per month.
Tier 2 Contributions are based on 6% of pensionable earnings up to 50% of the UPPER EARNINGS LIMIT (U.E.L) and this is currently capped at KES 18,000 per month
The total remittance under the NSSF Act 2013 by an employee shall therefore be KES 1,080 (360+720) and a similar amount by an employer of KES 1,080 summing up to KES 2,160 per employee per month.
The Act provides that an employer who is already contributing to a registered retirement benefits scheme can apply to pay their Tier 2 contributions to their Scheme instead of NSSF. This is referred to as Contracting-Out.
4. What is the process of contacting out?
Employers shall apply to the Retirement Benefits Authority (RBA) for Contracting Out the NSSF Tier 2 Contributions by completing the Form C1 and submitting the required documentation. Following approval, a Contracting Out certificate shall be issued by RBA and will be submitted to NSSF. Once approved to Contract-Out, an employer can apply to have the Tier 2 contributions already remitted to NSSF to be paid back to the Scheme.
5. What happens to my benefits already with NSSF prior to the implementation of the Act?
Any benefits under the old NSSF Act will remain as is and will be accessed at the retirement age of 60. They will be paid as a cash lump sum under the Provident arrangement as per the old NSSF scheme.
6. How has the Employer been impacted?
As an employer, you will be required to review and revise your payroll structure and systems to align with the provisions of the Act. The employer will need to check if there is a need to review the current pension contribution rates to align with the minimum rates of 6% for both employer and employee contributions.
7. Will the total contributions be submitted to the NSSF?
Only Tier 1 contributions must be remitted to NSSF. Tier 2 and any other amounts above that can be submitted to a private scheme through the Contracting Out process. Where a private scheme is not in place, both tier 1 and tier 2 contributions must be remitted to NSSF.
8. What is the benefit of submitting your Tier 2 contributions to Britam?
Britam will facilitate the set up of a private retirement scheme where you get to enjoy the following salient benefits;
- Support during the set up and Contracting Out process
- Superior returns: Guaranteed Rate of Return and competitive Bonuses
- Superior service including self-service portal access for employees
- Free member Education and continuous industry updates
- Prompt settlement of pension benefits claims
- Tailor made end-to-end Post retirement Plans
- Compliance: Transparency in all our dealings and compliance with laid down investment regulations
- Dedicated Relationship Manager (pension expert) for each employer
- Management of risk by having a portion of your retirement benefits invested in a trusted professionally managed company
TO SIGN UP CONTACT:
GALLIN WEKESA:FA@Britam gwwekesa@britam.com
0712-870-447