A Retirement Benefits Scheme can be either be a Pension Fund or a Provident Fund. The objective of a pension fund is to provide its members with an Annuity (pension) on retirement while the objective of a provident fund is to provide a lump sum cash benefit to a member on attainment of retirement age.
Deposit Administration is an investment medium for retirement funds which operates by way of pooling the subscribers’ contributions in a common fund and hence, a greater spread of investments can be obtained. The funds invested in a pool enjoy two levels of guarantee:
A minimum rate of return is provided during a time period.
Fund value, capital contributions plus credited interest cannot be impaired by any subsequent investment volatility.
ICEA has been investing pension funds for over 45 years with a superior performance record. As at 31st December 2009 ICEA retirement funds were in excess of Kshs. 14 Billion.
ICEA pursues the following principles with regard to pension funds investment:
Safety and security of clients’ assets by:
i) Spreading Investments as widely as possible to ensure safety of capital invested, spread by industry, class of investment, by management involved and where applicable by geographical areas; and
ii) Ensuring investments are in conformity with the law in particular the Kenyan Insurance Act and Retirement Benefits Act.
Maximising of return on capital invested, commensurate with safety of capital by way of income and capital appreciation.
Maintaining liquidity levels that guarantee prompt settlement of surrenders and pension payments. This is achieved by matching as far as practicable maturities with projected fund needs, so as to reduce the chances of distress or untimely selling off to pay benefits, or undue reinvestment at unsuitable times.
