Income drawdown Fund provides an option to retired members of a scheme to drawdown regular income from their retirement savings as an alternative to traditional annuities offered by insurance companies.
Kesho Hela a registered retirement scheme that allows a retiree to reinvest their accumulated retirement savings and is set up to provide regular income.
What is Kesho Hela Income Drawdown Fund?
How does it Work
- Provides a regular income whilst the balance is being invested
- Operates like a normal Registered Retirement scheme with the governance structures in place.
- Income of the investments are clawed back and forms part of the running balance.
- Members drawdown a percentage of their running balance as prescribed by Retirement Benefits Regulations.
- Minimum drawdown period is 10 years after which member shall decide if to continue with the drawdown or purchase an annuity or take the full lump sum.
- Minimum drawdown period is 10 years after which member shall decide if to continue with the drawdown or purchase an annuity or take the full lump sum.
Governance of the Scheme
- The scheme is established as a trust and as a separate legal entity by the founding company, Enwealth Financial Services Limited.
- It is registered and regulated by the retirement benefits Authority (RBA) and the Kenya Revenue Authority (KRA) for tax exemption benefits.
- The scheme assets are held by the appointed custodian in a nominee account and separated from the assets of the Custodian and the founding company enhancing the security of your retirement nest egg.
- The scheme has an appointed Corporate Trustee who is independent from Enwealth Financial Services Ltd and watches over the operations of the scheme on behalf of the members.
Benefits of an Income Drawdown Fund
- Investments that are moved into the income draw down are tax exempt as opposed to one who may decide to take the lump sum, as they will be taxed according to the prevailing tax rate for the different amounts.
- Investment income allows you to enjoy continuous investment income whilst drawing on their funds.
- The income draw down cuts to the heart of the matter, giving value for your money and making sure that you have a comfortable and progressive retirement life.
- Members who do not prefer insurance companies therefore the income draw down provides a choice for them to opt out of the annuities
Frequently Asked Questions
How do I join?
The member will have a session with financial consultant who will take the member through the product and based on the amount transferrable generate a projection of earnings.
When the member is okay with the projection, he/she will fill an application form, a nomination of beneficiary form and sign the projection.
Who is eligible to join?
Members who have reached retirement age are eligible to join the income draw down fund.
What happens in the unfortunate event of death?
On the death of a member, the funds will be used to provide an income to the nominated spouse(s) and/or the dependent children either by purchase of an annuity or a continuation of an income drawdown plan to the dependents. Otherwise it shall be paid to the nominated beneficiaries or dependents.