Chronicle Editor
Oliver Kazunga, Senior Business Reporter
THE Insurance and Pension Commission (IPEC) has reviewed the annual pension benefit commutation to $36 000 from $6 000 taking into account the prevailing macro-economic environment.
This means that a pensioner who receives $36 000 and below as pension benefits per annum, now qualifies to receive his or her full benefits at once rather than having the money preserved for regular payouts.
In a circular issued on July 21, 2021, IPEC said prior to gazetting into law by the Government, it is exempting the pensions industry, in terms of section 24 of the Pension and Provident Funds Act [Chapter 24:09], from applying the prescribed minimum pension of $6 000 in the determination of commutation and preservation.
“The monthly pension applicable for commutation and preservation purposes is currently pegged at $6 000 per annum, which translates to $500 per month, this amount has become very low,” said IPEC.
In this context, the commission submitted a proposed amendment of regulations prescribing minimum pensions to the Ministry of Finance and Economic Development.
“The commission hereby exempt the pensions industry, in terms of section 24 of the Pension and Provident Funds Act [Chapter 24:09], from applying the prescribed minimum pension of $6 000 in the determination of commutation and preservation.
“In line with this exemption, the pensions industry shall apply $36 000 in the determination of commutation and preservation amounts.
“The application of this revised amount is with immediate effect,” it said.
– @okazunga
Online Reporter