GUIDELINE ON ASSESSING RETIREMENT BENEFITS

Withdrawal from retirement savings account (extract from section 3 of the Pension Reform Act 2004):

3. –(1) Subject to section 3 (2) as from the commencement of this Act, no person shall be entitled to make any withdrawal from his retirement savings account opened under section II of this Act, before attaining the age of 50 years.

(2) Notwithstanding the provisions of subsection (1) of this section, any employee who

(a) Is retired on the advice of a suitably qualified physician or a properly constituted medical board certifying that the employee is no longer mentally or physically capable of carrying out the functions of his office;

(b) Is retired due to his total or permanent disability either of mind or body: or

(c) Retires before the age of 50 years in accordance with the terms and conditions of his employment shall be entitled to make withdrawals in accordance with section 4 of the Act.

(3) The Medical Board or suitably qualified physician under subsection (2) of this section may, at the request of the employee be made once in every two years, review the fitness of the employee and where the medical board certifies that he is now mentally and physically capable of carrying out functions of his office, he may re-enter the scheme upon securing another employment.

(4) For purpose of subsection (1) of this section, the authentic age of an employee entering the public service or any other employment shall be that submitted by him on retiring the service or taking up the employment.

Retirement benefits (extract from section 4 of the Pension Reform Act 2004):

4. – (1) A holder of a retirement savings account upon retirement or attaining the age of 50 years, whichever is later, shall utilize the balance standing to the credit of his retirement savings account for the following benefits

(a) Programmed monthly or quarterly withdrawals calculated on the basis of an expected life span;

(b) Annuity for life purchased from a life insurance company licensed by the National Insurance Commission with monthly or quarterly payments; and

(c) A lump sum on the balance standing to the credit of his retirement savings account: provided that the amount left after that lump sum withdrawal shall be sufficient to procure an annuity or fund programmed withdrawals that will produce an amount not less than 50 percent of his annual remuneration as at the date of his retirement.

(2) Where an employee retires under paragraph (c) of subsection (2) of section 3 of this Act the employee may on request withdraw a lump sum of money not more than 25% percent of the amount standing to the credit of the retirement savings account: provided that such withdrawals shall only be made after six month of such retirement and the retirement and the retired employee does not secure another employment.