TSC STAFF RETIREMENT BENEFITS SCHEME

The TSCSRBS (“the Scheme”) was established on 1st July 2012, pursuant to the provisions of Treasury Circular No.18 of 2010 and subsequent closure of the Defined Benefits (DB) Scheme on 30th June 2012.

• The Scheme commenced operations on 1st July 2012.
• The Scheme is operated on a Defined Contribution arrangement.
• The members eligible to the Scheme are the Permanent & Pensionable employees between the age of 18 and 50 years.
• Early Retirement Age : 50 years.
• Normal Retirement Age : 60 years and 65 years of age for members who are persons living with disability.
• Contribution Rate :
  • 10% of basic salary (Member)
  • 20% of basic salary (Employer)
• On reaching retirement age, a member will carry 1/3 of the accrued benefits as a lumpsum and 2/3 is channeled towards purchase of a monthly pension after applicable taxes.
• A member may decide to hold their benefits in the scheme and access them after 65 years of age at which time the benefits will not attract taxes.
• A Member is encouraged to make additional voluntary contributions (AVC) through formal application.

UPDATE ON CONVERSION TO DC

The employees in the DB scheme were given three options:

• Remain fully in the DB scheme (Option A);
• Retain accrued benefits in the DB scheme and join the DC scheme (Option B); and
• Transfer fully to the DC scheme (Option C).

Annuities were purchased for current pensioners and continue to be purchased for all pensioners in the DB scheme as and when they retire from service.

BENEFITS PAYABLE ON WITHDRAWAL

On withdrawal of benefits before attaining retirement age:

• The member can access an equivalent cash lump sum of 50% of the accrued pension.
• The remaining 50% pension is deferred till attaining the early retirement age. This benefit will be subjected to 1/3 lumpsum and 2/3 pension.

BENEFITS PAYABLE ON DEATH IN SERVICE

• Benefits as for Normal retirement with the pension paid to the widow and orphans.
• A group life policy provides risk cover for 4 times annual salary in the event of death.
• The spouse is entitled to 50% of the pension payable monthly.
• Eligible children up to a maximum of 4 are entitled to 12.5% of the total pension payable monthly until the age of 18 years.
• The pension for the children can paid up to the age of 23 years upon presentation of proof that the children are still in school.

OPTIONS IN PURCHASING PENSION

Below are options for purchasing a pension with either your two-thirds (2/3) or full benefits:

1.  ANNUITY 

An annuity is a contract between you and an insurance company that requires the insurer to make payments to you, on a monthly basis for the rest of your life. This comes with available options as outlined below;

1. Single Life – A single-life payout is an annuity or pension option that means that payments will stop when the annuitant dies. Here, payouts are generally larger on a per month basis since the payments stop upon the death of the annuitant.
2. Joint Life - In a joint-life payout, payments continue after death to the annuitant's spouse. This comes with a Reversion rate of 100% or 50%.
3. Guaranteed Fund - one may opt to guarantee the pension for the following periods: 0, 5 years,10 years,15 years and 20 years. If death happens before the period is reached, the Nominated Next of Kins are paid for the remaining period.
4. Escalation rate - You may choose a fixed amount (0%,) or an escalation rate of 3%,5%,7% or 10%.

2.  INCOME DRAWDOWN 

Income drawdown is a way of getting pension income when you retire while allowing your pension fund to keep on growing. Instead of using all the money in your pension fund to buy an annuity, you leave your money invested and take a regular income direct from the fund.

• You may draw your income down on a Monthly basis, Quarterly, Half-year or Annually.
• You may withdraw up to 15% within a year.
• Minimum investment period is 10 years and maximum of 15 yrs.

After the period you can;

1. Withdraw the balance
2. Purchase an annuity
3. Renew IDD for another 10 -15years.

You must nominate a Next-of-Kin.

You may invest 100% of your benefits to the income drawdown or segregate some percentage to purchase an annuity.