Madison Money Market Fund: Daily Yield: 10.07% Effective Annual Yield: 10.59%
The scheme is aimed at organizations who are ready to be entangled in legal, administrative and statutory liabilities applicable to retirement benefits scheme. It is ideal for employers who set up their own staff Retirement Scheme, and are willing to flexibly facilitate contributions, collection and remittances and are ready to fully comply with requirements for setting up a scheme. This are categorized under occupation benefits as further described below:
OCCUPATIONAL BENEFIT SCHEMES
The sponsor has the option of choosing between a Provident and Pension Scheme.
- The members will be paid a lump sum benefit upon retirement.
- The retiree has the option of taking the funds upon retirement and using them as they please.
- Upon accessing the funds, an employee can purchase an annuity which will guarantee a life time regular income.
- Once a member retires and takes up their funds, the Scheme is freed from dealing with that member in future.
- The members will be paid a third of the pension upon retirement while two thirds is retained to purchase a pension that is payable for the rest of one’s life.
- The member has the option of using the whole amount to purchase the annuity which will guarantee a life time regular income.
- Once a member retires, the Scheme Trustees have the responsibility to ensure that the annuity is paid at the agreed intervals till the death of the annuitant.
METHOD OF FUNDING (Defined Contribution)
The employer and the employee make contributions to the fund each month as a percentage of the employee’s salary, but should not be more than 30% of one’s basic salary. For example, the contribution can be 10% from the employee and 10% from the employer, and can be reviewed on advice by the sponsor and trustees. The contributions accumulate over time in the name of the employee. At retirement, benefits are paid to the employee inclusive of the interest that has accrued over time.
OCCUPATIONAL BENEFIT SCHEMES
INVESTMENT: OUR RECOMMENDATION
In terms of investments, scheme funds shall be invested in a guaranteed fund.
- Benefits of investing in a guaranteed Fund include:
- Both contributions and interest once declared are guaranteed.
- Schemes in the Fund participate in a diversified investments portfolio which they would otherwise not afford on their own. This minimizes risk while not sacrificing returns.
- Costs of running the scheme are minimized.
- Benefit from the services offered by professionals such as custodians and Fund managers. The Administrator hires services of these professionals for the entire pooled funds as investment in guaranteed funds are rigorously regulated this helps in reducing the scheme running cost. The Administrator will also recommend a suitable lawyer for the fund among the service providers.
- Some level of consistency in terms of returns is guaranteed.
- Contributions up to Kshs.20,000.00 are tax deductible; one can contribute up to 30% of their income to registered pension scheme.
- Transfers from other registered schemes are allowed; such transfers are tax-exempt
- The retirement benefit scheme can now facilitate members to acquire homes using their pension funds.
PERFORMANCE OF THE GURANTEED SCHEME
Below is what Madison has declared in the last 5 years:
To enable us issue a quotation, we require the following:
- Schedule of members names
- Basic Salaries
- Contribution Rates for Employee and Employer
- Retirement date set by the company
When does one retire?
The normal retirement age is 60 years; however early retirement is allowed at 50 years.
Will I access full benefits at retirement?
Yes, this is a provident fund that allows you to access 100% of your own contribution and 100% of employer’s contribution at retirement or early retirement at 50 years.
Can I access my funds before retirement?
Where a member leaves employment before attaining the specified early retirement age, that member may opt for payment of not more than fifty per cent of his total accrued benefits and the investment income that has accrued in respect of those contributions.
How much should I contribute?
The minimum contribution per month is Kshs. 500 per month. Quarterly, half yearly, annual or single contributions are also allowed. Members can also transfer funds from other schemes and consolidate them under one policy.
What happens if contributions stop?
The fund shall continue to earn interest without any penalty.