A pension is a fund into which a sum of money is Contributed during an employee’s employment years or an individuals active years and from which payments are drawn to support the person’s retirement from work in the form of periodic payments.
Growing old is mandtory and that means that one has to age with dignity. “Ujana ni maua” Research has shown that the dependence ratio is rising as people age while that family bond is no longer strong. Individuals educate their children to be indipendent and not depend on them. The same research has also shown that people are living longer hence you need to plan for your old age years.
It is important to note that The cost of medicals at this stage is normally high.
What is Kilele?
Kilele is an individual Pension Plan designed to address all your retirements needs for as low as Kshs. 500.
This is a retirement benefit arrangement designed on a defined contributory basis where by the growth of the benefit is made up of the amounts contributed and the interest
The main objective of this scheme is to help individuals save for their retirement
It has an optional last expense benefit upon death of the principal member
The plan is registered with both the Retirement Benefits Authority (RBA) and the Kenya Revenue Authority (KRA) hence members can enjoy tax privileges on their benefits
How does Kilele Work?
- You will contribute an amount of money, which is then invested towards building your retirement The contributions may not necessarily be a proportion of your income. However, it is advisable for you to contribute a percentage of your earnings (Subject to a tax deductible limit of 30% of salary/earnings) so that your ultimate benefits would reflect your previous earnings to help preserve the standard of living you enjoyed before retirement.
- Contribution payments can be made monthly, quarterly, half yearly, annually or on ad hoc basis to suit your income streams.
- You can choose to pay the contributions through personal cheque, standing orders to our bank to deduct and remit to us contributions, direct debit authority to allow us debit your account with the contribution amount, payroll deduction from employer, M-Pesa and cash payments receipted at our head or branch offices
Who can Join Kilele?
- Anyone who is employed or self-employed may open an individual Pension Plan. This means that its good for those in emploment and the Juakali Sector. Examples include those in the security industry, an employer can purchase this for their househelps, Kenyans working in diaspora.
- Anyone who is a member of an occupational scheme (employer sponsored) who would wish to supplement with the IPP.
What other benefit can you get on Kilele (Last Expense Benefit)
- The policy provides for funeral costs (one off payment) in case of death of a policy holder covered
- A waiting period of 3 months from policy commencement date subject to full premium payment unless death occurs through accident(no waiting period)
- Death claims are paid within 48 hours of reporting & documentation.
What are the Tax privileges/Benefits you can get on individual Pension Plan (IPP)
- The contributions you make to this arrangement reduce your income due for taxation as it is deducted before tax. The maximum tax deductible on contributions is the lesser of Ksh. 20,000 per month (240,000 per year) or 30% of your pensionable income.
- On payment of benefits, tax exemption is also available which is directly linked to the number of years you are in the scheme. The pension benefit payable to you on or after your 65th birthday is tax free
How will your Money be Invested
- Total contributions and past returns are guaranteed by Pioneer assurance
- The funds in the individual pension accounts are invested in a guaranteed fund which ensures that your accumulated contributions plus interest are protected from capital erosion
How can you Access your Benefits
- Access of the retirement benefits savings is regulated under the Retirement Benefits Early retirement is possible at age 50.
- You may also access your money on early withdrawal (only benefits secured by member contributions and half of employer contributions and interest). The remaining benefits secured by employer’s contributions will be preserved until retirement age
- This preserved benefit can also be accessed before retirement when an IPP client is emigrating to another country or in case of ill health
- In the event of member contributions alone, a member can access in part or full access of accumulated benefits.
How has Pioneer insurance Pension Investment been performing in the Last 5years
Pioneer 5 Year Average: 46%
Year | Performance |
2019 | 11.0% |
2018 | 11.5% |
2017 | 11.5% |
2016 | 10.5% |
2015 | 11.0% |
Funeral Expense Benefit bands
Premiums payable annually;
Premium Bands | Sum Assured | Annual Premium |
Adults below 50 Yrs | 50,000 | 600 |
Adults between 50-74 | 50,000 | 750 |
Why should you consider Pioneer Individual Retirement Plan? How unique is the Kilele Plan compared to other Pension Plans
- It is flexible to suit your ability to contribute towards your retirement savings
- Tax benefits both at the time of contributions/savings and also when cashing in the final benefits
- The Minimum guaranteed interest rate of 5% per annum
- If the declared rate is higher than 5% we will pay the higher rate. The difference in guaranteed interest and declared interest is paid as a bonus to all
- Annual fund value statements issued to all
- Flexibility on the side of the member to increase the amount of
- The Individual Pension Plan is portable and can be transferred to another scheme of a client’s choice, subject to terms and conditions in the policy
- Premiums can be paid as single lump sum or at regular
- May provide a financial cushion when a member loses their job/income
- Invaluable tool for disciplined and long term savings for retirement
- The IPP will enable you as a retiree to be self-supporting
How much will i earn from Kilele Plan. Estimated Earnings from Kilele Plan
Term Years | 12 | 12 | 12 |
Monthly Contribution | 7,500 | 10,000 | 15,000 |
Total Contributions after 12 Years | 1,080,000 | 1,440,000 | 2,160,000 |
Interest Earned at 10% | 931,278 | 1,241,704 | 1,862,556 |
Accumulated Fund after 12 Years | 2,011,278 | 2,681,704 | 4,022,556 |
Frequently Asked Questions (FAQs)
- Are there any risks I need to know about?
Your money will be invested as part of the Pioneer pooled funds in a balanced portfolio and Pioneer guarantees your contributions and minimum interest rate.
- Can my employer also contribute?
Your employer can contribute towards your individual pension plan. All you need is to advise us on breakdown between your contributions and the employer’s.
3. What happens if for various reasons I can’t continue with regular contributions?
The contributions you have already made to the plan will continue to earn interest and you can restart your contributions when your financial situation allows in future. Otherwise your account will continue to be credited with interest until early withdrawal or retirement date.
4. Are my contributions to the Individual Pension Plan tax deductible?
Yes. The PIONEER Individual Retirement Benefits Plan is registered with both Retirement Benefits Authority and Kenya Revenue Authority and contributions made into the plan attract the same tax treatment as other registered retirement benefits schemes.
5. What happens to my savings if I die before I retire?
Your benefits will be paid to nominated
6. Can I transfer my pension fund to another?
Yes, it’s possible to transfer your fund to any other registered pension scheme.
7. Can I withdraw my fund from Pioneer before retirement?
You may terminate the contract and withdraw the fund at any time. However this will be subject to the relevant termination charges as indicated in your policy document and taxes payable as per the relevant taxation laws.
8. When is the retirement benefit paid?
When you attain the normal retirement age of 60; or any other age not less than the minimum retirement age of 50 years.
9. How is my retirement benefits paid?
Your retirement can either be paid as a lump sum, or a pension secured by purchasing an annuity from Pioneer or from the market. You can also take your benefits in form of installments over a period of time.
10. How to get started?
Complete the application form and attach a copy of your ID & PIN. You can also Join by dialing *887# and following the steps below
What you Need to know ABOUT PIONEER INSURANCE
Pioneer Assurance Company Limited, formally Pioneer General Assurance Society Ltd was established in 1930 as the first company in Kenya to insure Africans. The Company’s registered office is situated at Pioneer House along Moi Avenue, Nairobi.
The company has 18 branches countrywide with a total of over 640 sales representatives spread across the country in different counties.
The company has put in place a robust ICT system which is capable of providing efficient and effective service delivery with a team of professional and qualified staff who would provide quality services to its customers.
The company is positive that with the enormous experience in handling very large schemes, they shall confidently deliver the required services to you or your institution to your full satisfaction given the opportunity.
Their Vision
To be the leading and preferred life insurance company in Kenya.
Their Mission
To offer quality insurance products and services to our customers and deliver value to stake holders.
Their Values
Integrity, Teamwork, Empowerment and Innovation
FOR MORE INFORMATION, CALL US ON 0788-503200