BRITAM Individual Pension Plan

PERSONAL PENSION/ PROVIDENT PLAN

1. The Key Objectives of A Personal Pension / Provident Plan

a. To provide self employed or employees in organizations that do not operate occupational pension scheme, with an opportunity to save regularly for a reliable and long-term retirement Income.
b. To enable self employed or employees in organizations that do not operate occupational pension scheme to take advantage of the generous income tax relief available to members of a registered retirement scheme.
c. To enable former members of an occupational scheme to transfer their deferred benefits giving them more direct control of their retirement planning, with an opportunity to continue making further contributions into the scheme.

2. Key Benefits

a. Tax deductible contributions: The monthly contribution is tax deductible at source i.e. your contribution will be deducted from your gross pay before P.A.Y.E is computed. The current maximum tax deductible contribution is Kshs.20, 000.00 per month.
b. Employer Contribution: An Employer of the policy holder may also contribute and claim tax relief on the same as long us the maximum tax deductible limit of Kshs.20, 000.00 per person is not exceeded.
c. Tax exempt investment income: The interest earned is exempted from tax in full.
d. Compound interest: Compound interest accrues on the contributions received, leading to a faster accumulation of your fund.

TEN YEARS DECLARED INTEREST RATE
YEAR DECLARED INTEREST
2003 10.60%
2004 7.50%
2005 10.25
2006 18.00%
2007 10.50%
2008 6.00%
2009 9.00%
2010 15.00%
2011 6.00%
2012 16.00%
2013 16.00%
2014 16.00%

2015

2016

2018

e. Portability: Your Personal Retirement Plan is your own property. It is therefore not affected by changes in employment. The member is free to continue with the scheme after leaving the current employer and enjoy all the benefits of the scheme.

f. Guaranteed Capital and Interest:

i. BRITAM guarantees the capital (member contribution) against any form of reduction.
ii. BRITAM also guarantees that the interest rate shall not fall below 5%.

3. Tax Free Withdrawal Benefits

Currently, a plan holder can cancel the policy upon leaving employment and obtain a refund of the accrued value (employee contribution plus maximum of 50% of employer contribution where applicable) net of any applicable withholding tax. The remaining 50% of employer contribution, if any, remains ‘locked’ in until retirement age.
The law allows a tax free withdrawal benefit equal to Kshs. 60, 000.00 per year of membership, up to a maximum of Kshs.600, 000.00.

4. Tax exempt retirement Benefits: Upon Retirement, the client may opt for:
a. Pension Fund Scheme:
i. 1/3 of the accrued value on attainment of retirement age can be commuted (paid as a single lump sum) out of which Kshs. 600, 000.00 is tax free.
ii. The balance of the accrued value must be taken as a monthly pension (this depends on the prevailing annuity rates applicable as at the date of retirement) guaranteed for five or ten years and payable thereafter for life.
iii. Monthly Annuity (Pension) is tax free after age 65.

b. Provident Fund Scheme:
In this case the client will receive the entire amount accrued (as single a lump sum) out of which a maximum of Kshs. 600, 000 is tax free.

5. Charges
i) Administration fee equivalent to 1.5% of annual contribution (free in the 1st year of contribution to 31st of December)

ii) RBA levy of 0.2% of the fund per year

NB. BRITAM as the scheme sponsor will meet the expenses of the scheme.

6. Other Benefits
Following the RBA gazette notice of June 2009 on the relevant RBA rules, members are free to use up to 60% of the accumulated funds to access a mortgage facility. Britam has developed a special product in this respect in conjunction with Housing Finance.

7. What do you need to join the scheme?
a) Application/ Enrolment Form
b) A copy of I.D. or Passport.
c) Your contribution/payment
d) Copy of PIN

 

CONTACT

GALLIN WEKESA

0712870447-

FINANCIAL ADVISOR-BRITAM- gallywexa@gmail.com,

 

 

Numbers 8:24-26 “Now regarding a descendant of Levi who is 25 years and above, he is to enter work in the service at the appointed place of meeting, but starting at 50 years of age, he is to retire from service and is no longer to work. He may minister to his brothers at the Tent of Meeting by keeping watch, but he is not to engage in service. This is how you are to act with respect to the obligations of the descendants of Levi.”

Proverbs 16:31 Gray hair is a crown of glory; it is gained in a righteous life.

Proverbs 20:29 The glory of young men is their strength,gray hair the splendor of the old.