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Why do I start a personal retirement scheme?

This is a Scheme that has been put in place to ensure that contributors have something to lean on upon retirement or in case of retrenchment. Life never ceases regardless of these circumstances and this scheme entitles you to comfort even when monthly incomes are stopped. A personal retirement scheme can be Contributory (Employer sponsored) or Non contributory (individual sponsored).

Why should I enroll now?

This ensures that your lifestyle does not change with retirement. The sooner you enroll, the more there is to gain from the scheme. You are also getting old and consequently the time to save gets reduced by the day.

How much should I contribute?

The decision on how much to contribute lies with the individuals and if employed, the employer determines what is the best to give his staff .The minimum acceptable amount for an individual is Kshs.2000. For a group PRS where they’re are more than one contributor, the members can contribute even below Kshs.2000 ie. Kshs.1500, Kshs.1000 etc. This gives an opportunity incorporate all employees in an organization including support staff.

Taxation

Benefits enjoyed are tax rebates on the contributions while investment income earned is tax exempt. Contributions to the scheme are tax allowable up to the maximum limit of Kshs.20,000 p.m. or Kshs.240,000 per annum. A statement showing the growth and personal contributions will be sent to you after every annually.

What kind of return can I expect from the scheme and on what basis is it allocated?

The Funds are invested in the money market and the prevailing money market rates are the kind of return. An interest rate is declared annually and it’s dependent upon the performance of the economy and the level of the interest rates. We Declare rates yearly hence ensuring your money is compounded as many times as possible over a long duration.

Flexibility

This is a very flexible scheme in that:

• You can vary your contributions upwards or downwards depending on your financial constraints, hence not limited to the amount stated on the application form.

• You can withdraw from the fund any time between one year after entry to the retirement period stated on the application with a three months notice given.

• Whereas in other situations failure to remit a contribution may attract a penalty, failure to remit PRS contribution does not attract any fees.

Retirement.

At retirement you can:

• Withdraw the full-accumulated amount of your contributions.

• Purchase a tax-free pension meaning that an income that you arrange to be receiving on a monthly basis after retirement or upon leaving active service and is based on the accumulated fund of your PRS.

• Withdraw part of the accumulated fund as a lump sum and the other part can be used to purchase a pension.

Administration & Benefits payment.

• Prepares policy documents

• Carries out all registration procedures

• Issue tax exemption certificates

• Researches on the most optimal and safe investment projects for your money.

• Prepares annual statements of your account.

What would happen in case of death and I have not nominated beneficiaries to my fund?

Our agreement form gives you a chance to nominate beneficiaries in case of death. In the absence of such nomination, your next of kin would be deemed to be your beneficiary. Note that there is no tax on benefits paid to the widow and the children.

Are the funds guaranteed?

Yes, the principal is guaranteed. Once interest is declared it becomes capitalized and therefore guaranteed. There is a guaranteed minimum interest rate of 4%p.a.

If my contributions are paid directly by my employer, and then I leave the company, are the payments made directly to me or through the employer?

Withdrawals are paid directly to you and not the employer as the agreement is between you and ICEA Ltd.