What is A Personal Retirement Scheme?
A Personal Retirement Scheme (PRS), also referred to as a Personal Pension Plan, is designed to help you, as an individual, to save up for their retirement. The money is invested in various financial instruments that enable it to grow over the savings period with an intent to give you a regular income in retirement.
Upon attaining retirement age, you can claim their retirement savings in any of the following two ways:
- As Provident Fund Benefits
Under this option, you will receive all your retirement savings as a lump sum. You also have the option to take a portion of the fund to purchase an Annuity or an Income Draw-Down plan.
- As Pension Fund Benefits
Under this option, you will receive 1/3 of your accumulated retirement savings as a lump sum and the balance used to purchase an Annuity guaranteed for at least 5 years or an Income Draw-Down plan.
Pension plans in Kenya are mostly offered by insurance companies and are different from life insurance policies. Pension plans are purely about an income in retirement whilst for life insurance, insurance company pays you a lump-sum payment, known as a death benefit, to your beneficiaries upon the unfortunate event of your demise. Further, life insurance is chosen based on the needs and goals of the owner. Pensions in Kenya are regulated by the Retirement Benefits Authority (RBA) whilst insurance policies are regulated by the Insurance Regulatory Authority (IRA).
You can buy your Personal Retirement Scheme online from as low as Kes 1,000/- at the click of a button by visiting prs.ICEALION.com
What is the ICEA LION Personal Retirement Scheme?
The ICEA LION Retirement Scheme offers you the option to have either the provident fund or and pension fund option. It also allows you to setup a retirement plan that you can contribute to in any of the following ways:
- Self-Sponsored Scheme where you as an individual join the scheme and contribute towards it
- Group Scheme which can be in either of the following forms:
- Individuals come together and establish the scheme as a group and sponsor themselves. In this form, the individuals are not sponsored by their employer
- The employer establishes the scheme and both the employer and employee make contributions
What are the Key Features of the ICEA LION Personal Retirement Scheme?
- Affordability: From as low as Kes 1,000/- per month, you can set up your Personal Retirement Scheme or pension plan.
- Tax Benefits: Pensions are also governed by the Income Tax Act (Cap 470) and valuable tax advantages are provided for in the act. Subject to certain limits, your contributions, investment growth and benefits will all be tax-free. Any contribution exceeding the tax-exemption limit is invested separately, in a taxable fund.
- Flexibility: You can make your contributions monthly, quarterly, half-yearly or annually depending on your plans. You may change the frequency and amount of contribution at any time so long as it is not less than Kes 1,000/- per month. You can make contributions through salary deductions, M-Pesa payments or direct debits with your financial institution.
- Tax-Exempt Single Lump-Sum Transfers Between Schemes: You can make such a transfer from other registered funds to ICEA LION’s Personal Retirement Scheme tax free.
- You Can Top Up To Keep Up With Inflation: You may increase your periodical contribution in order to keep up with inflation. The rate of escalation in your periodical contribution can be set out at the beginning of your plan with us, or you can let us know when you wish to have the increase come into effect.
- Your Contributions Belong To You: The contributions to your Personal Retirement Scheme remain yours whether they are self-funded or employer-funded, even if you change your job or are no longer in employment for any reason.
- Retirement Age: The minimum allowed retirement age range by Kenyan law is 50 -75 years and ICEA LION’s Personal Retirement Scheme aligns to this. . This means that although withdrawal terms are flexible, if you wait to claim your retirement contributions in this bracket, you will receive them tax free. Click here to learn about how you can make withdrawals before 50 and the implications of early withdrawal.
- Growth of Your Contributions: The contributions you make are invested in various financial instruments with a minimum guaranteed interest of 4% per annum. This interest is earned on a daily basis and ensures that small, regular contributions grow into significant retirement savings over time. Our performance for the past 8 years is illustrated below
- Mortgage Security: 60% of your accumulated pension savings can be used as additional security by a lender for your mortgage
- We Pay Balance of Interest to Leavers: This means that if you leave the scheme before the declaration earned for that year, you will still receive the interest on your contributions earned up to the point of withdrawal when it is finally declared.
Why Invest With ICEA LION’s Personal Retirement Scheme?
- Despite the minimum guaranteed interest of 4% per annum plus a bonus, ICEA LION has offered competitive returns against the market average. Our performance for the past 8 years is illustrated below
- Your retirement or pension fund will be professionally managed by seasoned experts
- You will have access to an account manager for your scheme who is available to address your queries and requests
- We offer facilitation for member trainings if you are part of a larger group,
- We offer regular industry updates as well as pre-retirement training
- Your member statements and fund balances are updated monthly guaranteeing the accuracy of records.
- You can view and manage your account via our self-service portal
- We endeavour to settle claims quickly with a 5 day turnaround time from receipt of all required documentation
- You can buy your Personal Retirement Scheme from as low as Kes 1,000/- at the click of a button by visiting prs.ICEALION.com
- We have a heritage of stability: ICEA LION is the largest fund manager in the region with a Total Asset Base of Kes 90 Billion and managing a Total Pension Fund of Kes 63 Billion as at 31st December 2019
What Else Do I Need to Know About ICEA LION’s Personal Retirement Scheme?
- Treatment of Fund in Unfortunate Case of Demise: In the unfortunate event of the demise of the retirement scheme member, their nominated beneficiaries will receive your accumulated pension benefits
- Illustration of Estimated Earnings: Assuming you make contributions for 15, 20 and 25 years at Kes. 2,000 and Kes. 15,000 per month, the following will be the growth assuming a 10%* per annum rate.
|Term||Total Contribution||Retirement Fund|
- This is an illustration and the rate projected for the whole period and is not a guaranteed return.
Rate of Return on Investments
The 8 year Declared Net Rate of Return which was credited to member’s contributions is as follows:
|Year||Return on Investment (%)|
Click here to learn more about ICEA LION’s Annuities and Income-Draw Down plans.
To help you along, click here to watch a video that explains how you can decide on the ideal investment to make in light of your investment and retirement goals.
Now that you understand the basics of our ICEA LION Personal Retirement Scheme and would like to invest with us, click here to buy one online. If you would like to talk to us in person, you can call us on +254 719 071 999 or request a call back by clicking here.