As part of a major effort to strengthen financial stability within the small and medium-sized enterprise (SME) sector, Britam Asset Managers has introduced an innovative pension scheme tailored specifically for the needs of this crucial sector. Announced today, the new offering aims to provide affordable and accessible retirement planning solutions to SMEs, addressing a long-standing gap in the market.
The Britam Ngao Umbrella Pension Scheme is a multi-employer retirement benefit program that consolidates contributions from multiple employers. By pooling these funds, the scheme collectively invests and manages the assets to optimize retirement savings for its members. The Scheme is registered under the Retirement Benefits Authority (RBA) and is registered with KRA for tax exemption.
Sponsored by Britam Asset Managers, the Ngao Umbrella Pension Scheme was established to relieve companies and SMEs from the cumbersome task of setting up their own pension schemes. Instead, businesses can now participate in this Umbrella Scheme, which has already completed the registration process. This segregated pension fund enables employers to comply with retirement benefit regulations by adhering to the Scheme’s established rules.
Speaking at the launch, Barack Obatsa, Britam Asset Manager’s CEO said, “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.’’
An umbrella fund is a multi-employer retirement benefit scheme that aggregates contributions from multiple employers and members, managing and investing the funds collectively to benefit all participants. It operates under a uniform set of regulations, known as the Trust Deed and Rules, which apply to all involved employers and members. Like other retirement benefits schemes, an umbrella fund is registered with the Retirement Benefits Authority (RBA) and the Kenya Revenue Authority (KRA) and features a defined contribution provident fund.
‘‘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. 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.” Obasta added
The Ngao Umbrella Pension Scheme is ideally suited for a range of entities, including those with at least one employee who prefer not to create a standalone pension scheme. It also benefits smaller schemes seeking to delegate scheme management to experienced professionals. Additionally, it offers advantages to employers who sponsor existing schemes and wish to leverage economies of scale by pooling resources. Furthermore, it provides an option for employers looking to contract out of the National Social Security Fund (NSSF).
Joining the Scheme is a simple process with no setup costs or joining fees. Employers are required to pass a resolution to contract out Tier 2 contributions, inform employees of this decision, and complete the necessary forms for approval by the Retirement Benefits Authority (RBA).
Once approval is granted, employers can begin remitting their Tier 2 contributions to the Britam Ngao Umbrella Pension Scheme, thereby ensuring compliance with statutory requirements. The scheme is designed to offer cash lump sum benefits to members upon their retirement.
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