LIFE INSURER CFC LIFE has launched an innovative retirement savings plan that allows small and medium enterprise (SME) clients to choose how the funds are invested.
Known as Boresha Maisha Umbrella Retirement Plan and targeted at SMEs and non-governmental organisations (NGOs), it gives clients a direct say in how the saved funds are to be invested. It is the first such scheme run by an insurance company in Kenya.
Under the plan, the employer is required to make up a certain monthly contribution, at a minimum of six per cent of the salary, which is matched by the employee’s contribution. The employer then makes a decision on how the funds will be invested: either in a Guaranteed Returns Fund of a Utilised Fund. Funds invested in the former are assured of a return regardless of the prevailing circumstances, while for the latter; returns vary, based on obtaining factors in the market.
For the Utilized Fund,clients can choose to spread their risks from a portfolio that includes a
Money Market Fund, an Equity Fund and a Balanced Fund. “Boresha Maisha Umbrella Retirement Plan is our answer to the need for a bankable retirement savings solution for our SME and NGO sectors. With the plan, we present these clients with a simple and affordable means to secure the future of their workforce, while maximising the return on their contributions and that of their employees,” said Managing Director Abel Munda at the launch.
Besides choice of portfolio, the Boresha Maisha Umbrella Retirement Plan also offers CfC Life customers a number of advantages: simple sign-up and a sound governance structure that segregates key duties with CfC Life designated as the plan’s sponsor, KCB Bank as trustee and serve as investment advisors. The plan is suited to answer the needs of organisations that have not been having retirement schemes and are seeking to opt out of the National Social Security Fund’s (NSSF) Tier II contributions.
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