Britam Asset Managers Kenya Limited has officially launched the Britam Ngao Umbrella Pension Scheme, a multi-employer retirement benefit plan designed to pool funds from various employers. This scheme invests and manages these funds collectively, providing significant benefits to its members through retirement savings.
By joining the Britam Ngao Umbrella Pension Scheme, businesses can avoid the complex and often costly process of registering a stand-alone retirement benefits scheme. This is especially beneficial for Small and Medium Enterprises (SMEs) that may find registration requirements overwhelming. The scheme’s structure as a segregated provident fund allows companies to easily join and comply with its rules, providing retirement benefits to their employees. Pooling funds from various employers enables the scheme to benefit from economies of scale, leading to higher investment returns. This collective approach ensures cost savings and improved investment outcomes through a diversified investment strategy.
The scheme offers cash lump-sum benefits to members upon retirement and is registered with the Retirement Benefits Authority (RBA) and the Kenya Revenue Authority (KRA) for tax exemption. It also complies with NSSF Tier 2 Contributions, 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, totaling a 12% contribution. 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. He added, “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 offers 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 simple, with no setup costs or joining fees. However, employers must pass a resolution to contract out Tier 2 contributions, notify employees of the intention to contract out, and complete 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 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. Managed by a team of highly professional service providers, the scheme offers Kenyan businesses reliable and efficient retirement benefits solutions.
