At retirement up to 25% of the member’s account is payable as a lump sum and the rest is paid in the form of pension.
A contributor who is not covered under the mandatory pension scheme or any other pension scheme is entitled to use a percentage of accrued benefits to purchase an annuity for life payable monthly or quarterly from a licensed Life Insurance company.
Annuity payments are paid out of the scheme, instead of being bought out with insurance companies. This allows a more dynamic and consistent pension payout, with discretionary increases instead of a flat-rate pension. The benefits of this approach are:
• Slightly higher pension benefits for the members overall as Super Fund operates with a non-profit objective
• Common discretionary pension increases to all pensioners of the Fund to offset, at least in part, the effects of inflation during the period of annuity payments
• Pensioners will also not be exposed to widely different practices by different insurers