REQUIREMENTS
- Fill out a proposal form
- KRA pin
- Premium payment
OUTLINE
A group pension plan is a retirement savings program offered by employers or organizations to their employees or members as a collective benefit. It is designed to help employees save for retirement by contributing some of their earnings to the pension plan. Group pension plans are also known as employer-sponsored retirement plans or workplace pensions.
DETAILS AND BENEFITS
The main features of a group pension plan include:
- Employer contributions: In most group pension plans, the employer makes contributions to the plan on behalf of the employees. These contributions are often based on a percentage of the employee’s salary or a fixed amount determined by the employer.
- Employee contributions: Employees also contribute to the pension plan through regular deductions from their salary. The employee’s contributions are usually optional, but many employees take advantage of the plan to build their retirement savings.
- Tax advantages: Group pension plans often come with tax benefits. Contributions made by the employer and the employee may be tax-deductible, reducing the taxable income for the year. Additionally, the investment growth within the pension plan is usually tax-deferred until retirement, when withdrawals are made.
- Investment options: Group pension plans typically offer a range of investment options, such as stocks, bonds, mutual funds, and other assets. Employees can choose how their contributions are invested based on their risk tolerance and retirement goals.
- Vesting period: Some group pension plans have a vesting period, which means that employees must work for the company for a certain number of years before they are entitled to the full value of the employer’s contributions. Once the vesting period is met, employees become fully vested in their employer’s contributions.
- Retirement age and withdrawals: The funds in a group pension plan are intended for retirement. Generally, there is a minimum age at which employees can start making withdrawals, and early withdrawals may be subject to penalties.