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Make pension saving mandatory to cut old age poverty

You probably know a little about pension plans, maybe you know someone who has one or could be you have a plan for yourself. A Pension plan provides a company's employees with a livable income for their retirement years. Although one may not see the advantages, all you need to think of is the access to lump sums of money after retirement that can help boost a new business and make up for the loss of income at that point. When someone retires they will experience reduction in income, instead of relying on family and friends, pension steps in to cover the day-to-day expenses.

This does not come without benefits along the way. The pension plan is registered with the Income Tax Authority which allows for; tax free allowance on contributions, none-taxable investment income and tax free allowances at the time of withdrawal. We describe this as tax relief, meaning your contributions towards the plan are tax exempt up to Kshs. 240,000 per annum.

The pension plan also allows for your contributions to be credited with interest declared every year (compounded daily), giving you a competitive rate of returns (average for 14 years-10.58%). Upon withdrawal, before the end of the year 6% interest is earned in that year. In line with all these benefits, your accumulated contribution could be assigned or used as collateral against a mortgage loan.

The Jubilee Insurance pension plans offer a guaranteed fund. This means your contributions and interest are guaranteed allowing you to focus on your passion and not your pension. You may contribute at your own pace whether it is monthly, quarterly, half-yearly or even annually. The contributions can be paid through M-pesa, Cheque, Bank standing orders or cash, whichever is convenient for you, allowing you to increase, decrease or suspend your contribution as your situation permits. The plan is portable and not affected by any change in employment.

Getting the pension plan is easy and simple; all you need to do is sign up by completing the application form which calls for your personal details, beneficiary details and a copy of your ID.

A man is not old until regrets take the place of dreams. Make an informed choice today.


Story by Business Daily

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