'At the payout phase
, tax is at 30 per cent but of course there is the first payment of Sh600,000 which is exempt.
In addition, annuitants may recognize less taxable income during the payout phase
, due to the partial recovery of basis associated with each payment.
The firm said that the plan covers cost of living by paying an increasing annual guaranteed income during the payout phase
. Annual payout of the guaranteed income commences after the premium payment term is over, the bank said.
"At a yield of 8% in the accumulation phase and our current annuity rates in the pension payout phase
, a 35-year old individual, who invests in this plan and pays around Rs.
Moreover, the Commission will develop a code of good practice for occupational pension schemes (second pillar), addressing issues such as better coverage of employee, the payout phase
, risk-sharing and mitigation, cost effectiveness and shock absorption.
While defined contribution (DC) pensions have enjoyed varying degrees of success during the accumulation phase, proponents of the DC model now confront the larger question of how participants will manage their capital throughout the payout phase
so as not to run out of money in retirement.
There is a minimum guaranteed payout to allay concerns about the possibility of both dying early during the payout phase
. 3) Annual payouts are assumed to be made at the beginning of each year to maximize calculated rates of return.
With the growing maturity of pension reforms, research on pension systems has shifted from an emphasis on the accumulation phase to the payout phase
for retiring workers.
After the participant retires, the value of the participant's underlying investments is converted into an annuity and the payout phase
In the payout phase
, the product has to be like a tripod.
In return for making a deposit into an annuity, the insurance company ultimately agrees to pay the owner (or owners) a specified amount (the annuity payments) periodically, beginning on a specified date--this is the payout phase
of the annuity.