NICO Pension operates a defined contributions pension scheme arrangement in line with the Pensions Act 2010 whereby both the employer and employee contribute. This arrangement is a very transparent and most straightforward pension scheme and it allows the members to directly benefit from the investment performance of the fund.NICO Pension operates a defined contributions pension scheme arrangement in line with the Pensions Act 2010 whereby both the employer and employee contribute. This arrangement is a very transparent and most straightforward pension scheme and it allows the members to directly benefit from the investment performance of the fund.
NICO Pension charges an administration fee of total payroll to cover the normal administration of the scheme, actuarial valuation every third year and general advice on the scheme operations.
Under the Defined Contribution Arrangement, each member will have two accounts allocated to him or her i.e. the member’s account and the employer’s account.
The Member’s 5% contributions and interest/ bonuses declared by NICO Pension will be credited to this account. The contributions plus interest / bonuses will be accumulating up to the time of Withdrawal, Retirement or Death.
The Employer’s 10% contributions (excluding the administration fee) for each member will be credited to this account, together with interest / bonuses which will also be accumulating up to the time of Withdrawal, Retirement or Death. Note the rate was previously pegged at 7.50% as the employer rate. This rate was applicable from the date of commencement of the Pensions Act, 2011 (1st June, 2011) until December 2012 (the latest 1st January before the expiry of two years from that date).
Benefits under the Defined Contribution Arrangement vary subject to the withdrawal procedure. Upon attaining the Normal Retirement Age (between 50- 70years) of the scheme, a member will receive the pension which will be the accumulated sum in both MEMBER and EMPLOYER accounts including bonuses that will be paid out as stipulated by the Pensions Act and in line with the guaranteed periods. On death, benefits equal to the total sum of the full amount in the MEMBER’s account and the EMPLOYER’s account will become due payable to the member’s beneficiaries.
NICO Pension works to ensure a close relationship with clients and to keep members and employers well informed regarding the scheme operations, governing legislation and benefits due through frequent member communication. In addition, NICO Pension provides the employer with the contractual document governing the scheme after the employer endorses them and thereafter obtaining approval from Malawi Revenue Authority.
NICO Pension works according to agreed performance standards. Any deviations from these standards will constitute poor service from our end. However, we require the support of our client to provide us with all the requisite information timely fashion for us to achieve these performance indicators.