GROUP PENSION SCHEMES
NICO Pension Services company limited offers pension fund management in compliance with the Pensions Act 2023. The schemes are in a defined contribution set up where both the employer and employee make contributions. This is a transparent and convenient arrangement. The minimum contributions for employees is 5% of pensionable emoluments and 10% of pensionable emoluments for employers. These contributions once made are invested in various mediums to ensure secure and safe growth of pension savings.
Note: Voluntary contributions are allowed
Type of Fund
| TYPE OF FUND | DESCRIPTION |
| Stand-Alone | Registered Pension fund with Licensed employee and employer representative Trustees and with fund valued at not less than K1 Billion. |
| Umbrella Fund | Funds that sit in the guaranteed pooled fund with licensed Trustees who are advised on investment vehicles/ decisions by Pension administrator and investment manager. |
| Unrestricted Fund | Guaranteed pooled fund where investment decisions are made by a corporate trustee and the fund is Invested as a pool. |
| Non Guaranteed Fund | Benefits from the advantages of a non-insured fund while retaining the benefits of a large pooled fund. Its Pension committee is involved in investment decisions. |
Note: the Registrar shall not register a fund as an approved fund if it has
asset value that is less than K100 Million
How it Works
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.
(a) Member’s Account
The Member’s 5% contributions and interest/ bonuses declared by NICO Pension will be credited to this …
(b) Member’s Employer Account
The Employer’s 10% contributions (excluding the administration fee) for each member will be credited to this account, together with interest/ bonuses which will be accumulating up to the time of withdrawal, retirement or death.
NB:- 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.
Pension Administration Charges
NICO Pension Services charges tailor-made rates for administration of pension funds. The rate for administration services covers the normal administration of the scheme, actuarial valuation every two years and general advice on the scheme operations for the fund.
Benefits Under Defined Contribution Arrangement
Retirement Benefits
Upon reaching Retirement Age 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.
Depending on the total accumulated benefits:
(a) 50% will be paid as a lump sum… and 50% will be used to buy an annuity.
(b) Threshold benefits will apply. Upon leaving employment, a member may apply to access the pension contribution up to May 2011 as per the provisions laid out in section 87j(1). Fund rules apply.
Withdrawal Benefits
If a member changes jobs, their benefits are transferred from their existing employer’s pension scheme to the new employer’s pension scheme.
To access benefits before retirement due to unemployment, a member must wait for three months before they can apply to access their benefits. The member … will be paid out the full amount on the member’s account as per the provisions laid out in Section 88 of the Pension Act and the member will access the employer account at the attainment of retirement age earliest being 50 years of age. Upon attaining retirement age, if the member is continuing employment, they cannot withdraw their benefits as per Section 9 of the Payment of Benefits Directive.
Death Benefits
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 in one of the following ways:
i. The total of the benefits would be paid to the appointed beneficiaries or
ii. The total of the pension accumulated …benefits will be paid in the Minors Account if the beneficiaries are minors (under the age of 18) Sec 97.