Britam Asset Managers Kenya Limited has today officially launched the Britam Ngao Umbrella Pension Scheme, a multi-employer retirement benefit scheme. The scheme pools funds from various employers, invests and manages these funds collectively to ensure its members benefit from retirement savings.
By joining this scheme, businesses can bypass the complex and often costly process of registering a stand-alone retirement benefits scheme. This is particularly advantageous for Small and Medium Enterprises (SMEs), which may find the registration requirements daunting.
The scheme’s structure as a segregated provident fund allows companies to easily join and adhere to its rules for the provision of retirement benefits to their employees. By pooling funds from various employers, the scheme benefits from economies of scale, leading to higher investment returns. This pooling nature not only ensures cost savings but also allows members to enjoy improved investment outcomes, driven by a diversified investment strategy.
The scheme is designed to offer cash lump sum benefits to members upon their retirement. It is also registered under the Retirement Benefits Authority (RBA) and with the Kenya Revenue Authority (KRA) for tax exemption. It also complies with NSSF Tier 2 Contributions, further easing the compliance burden for participating employers.
Following a Court of Appeal ruling on February 3, 2023, the NSSF Act 2013 was declared constitutional, prompting immediate compliance by all employers in Kenya. The Act mandates that employers and employees each contribute 6% of the employee’s earnings, making a total contribution of 12%.
These contributions are divided into three tiers. Tier 1 contributions are mandatory payments to the NSSF, while Tier 2 contributions can be redirected to the Britam Ngao Umbrella Pension Scheme under a contracting-out arrangement. Tier 3 contributions, which apply to earnings above the upper earnings limit, are also directed to registered schemes like the Britam Ngao Umbrella Pension Scheme.
“The Britam Ngao Umbrella Pension Scheme is designed to support businesses in their growth journey by taking on the complex aspects of retirement planning, allowing them to focus on their core operations. Our aim is to ensure that every employee in Kenya has access to a secure, cost-effective retirement plan, and this scheme is a significant step towards achieving that goal,” said Barack Obatsa, Britam Asset Manager’s CEO during the launch.
Adding, “By signing up to this scheme, SMEs will not only enhance staff loyalty and retention, but will also provide a competitive package that attracts new talent.”
Investing in the Britam Ngao Umbrella Fund presents numerous benefits for employers. There are no setup costs or joining fees, making it a cost-effective solution. The application process is straightforward, requiring only an application form, member details, and the setup of contributions. Employers are also relieved of the fiduciary responsibilities typically associated with managing a retirement scheme, allowing them to focus on their core business activities. Moreover, the scheme is compliant with NSSF Tier 2 Contributions, adding another layer of compliance and benefit for employees.
The application process to join the Scheme is straightforward, with no setup costs or joining fees. However, employers must pass a resolution to contract out Tier 2 contributions, notifying employees of the intention to contract out, and completing the necessary forms for approval by the Retirement Benefits Authority (RBA). Once approved, employers can start remitting their Tier 2 contributions to the Britam Ngao Umbrella Pension Scheme, ensuring compliance with the statutory requirements.
The Scheme is ideal for any registered entity with at least one employee, smaller schemes seeking to avoid the operational complexities of running a stand-alone scheme, and employers looking to enjoy the benefits of pooling resources.
The Scheme is managed by a team of highly professional service providers, further enhancing its appeal to Kenyan businesses seeking reliable and efficient retirement benefits solutions.
