Pension Annuity
An annuity is an insurance policy that gives you a guaranteed income for the rest of your life or for a fixed amount of time. You can use your pension fund to buy an annuity that will provides you with a regular income after retirement.
The annuity can be taken individually or jointly with a spouse. If the annuity is shared with a spouse, it reverts to the surviving spouse in case one dies before retirement age. It is paid on a regular basis according to your preference whether monthly, quarterly, semi-annually or annually for life.
- Guaranteed period: This is a period of years during which annuity payments are guaranteed to be paid to the annuitant and/or his beneficiaries whether the annuitant is alive or not.
- Single or Joint Life: A retiree has a choice of taking an annuity on his/her life or together with a spouse.
- Escalating: To mitigate against inflation, a client may choose to purchase an annuity that increases either by 3% or 5% on the anniversary of the policy.
- Taxation: Annuity payments in excess of Kshs. 25,000 per month are taxed. Any figure above Kshs. 25,000 is subjected to usual PAYE rates.No tax is payable from age 65.
- Annuity in arrears: Britam’s annuity pays in arrears. This means that once the funds are received the initial payout is made at the end of the month.
- Enrolment form
- Copy of ID
- PIN number
- Age of annuitant (and age of spouse – if joint life)
- Gender of the annuitant
- Purchase Price – Lump sum funds
- Guarantee period option preferred
- Escalation rate – if applicable
- Minimum age: 55 years – This being the early retirement age prescribed by the
- Maximum age: 75 years
- Minimum amount: Kshs. 600,000
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