MEMBERSHIP OF THE SCHEME
What are the conditions for joining the Scheme?
To become a member of the scheme, one has to be confirmed as a permanent full-time employee of the university, and be formally admitted to membership by completing an Application for Membership Form. Every Eligible Employee is required to become a Member of the scheme as a condition of employment.
How can I join the scheme?
On confirmation as a permanent staff of the university, a person is required to complete an Application for Membership Form and a Death Benefit Nomination Form, which are then returned to the pension’s secretariat office. You will be required to provide evidence of age or any other information (appointment letter, birth and marriage certificates etc) as required by the Trustees of the scheme.
Copies of these forms can be obtained from the Secretariats Offices at MURBS Building.
If I join, what about other pensions I have elsewhere?
The Scheme accepts transfers from other approved and registered pension arrangements.
Can I transfer my benefits to another Scheme?
If you leave the Employer’s service before Normal Retirement Age and take up employment with another employer who operates a registered retirement benefits scheme you may request the Trustees to transfer to the other scheme the balance of your Member Account.
Can I rejoin the Scheme after I had previously left?
You can rejoin the Scheme after being re-appointed on having previously left employment of the sponsor, as a new entrant. If there were any deferred benefits due to you, the will now be transferred to your active member account.
Am I also a member of the NSSF?
Your membership with the National Social Security Fund (NSSF) is in no way affected by being a member of the scheme. However the university maintains a policy of retaining its own scheme instead of the option to participate in both.
CONTRIBUTIONS
What must I contribute to the scheme?
As a member of the scheme, you must make compulsory contributions of 10% of your pensionable salary. This amount will be deducted from your salary each month through the payroll and paid to the Scheme and is credited to the member portion of your member account.
How much does the university contribute to the scheme?
The University contributions to your member account will be 20% of your pensionable salary. This amount will be paid each month by the Employer and credited to the Employer Portion of your Member Account.
Can I make Additional Voluntary Contributions (AVC) to the Scheme?
If you wish, you can make Additional Voluntary Contributions to the Scheme. These amounts will be deducted from your salary each month through the payroll and credited to your member portion of your member account. It is a tax efficient way of providing extra retirement income. You can start paying AVCs on joining the scheme or at any other time. The whole of the AVCs may be taken in the form of a lump sum when leaving service.
Can I continue to make contributions to the scheme after I have left the pensionable service?
No. This Scheme has been established by the Employer to give retirement benefits to its employees. As soon you stop being an employee of the university you are no longer eligible to contribute to the scheme.
However, if a member is seconded or otherwise temporarily transferred to the service of an organization constituting ‘‘Other Public Service’’, he shall continue to be a member of the Scheme and pay contributions accordingly.
What happens if I am absent from work for a long period of time?
If the absence is authorized by the Employer, and if your Pensionable Salary is not reduced or suspended, your contributions and the Employer’s will be paid in full. If however, they are suspended or reduced, your contributions and the Employer’s contributions will also be suspended or reduced. The University however, allows you to continue catering for your own pension contributions if they were suspended.
INVESTMENT AND INTEREST
How and where the scheme’s assets invested?
The Scheme’s assets are invested in recognized investment markets, mainly in Kenya but sometimes in offshore markets. The investments fall into two main categories;
Quoted equities – shares in companies whose shares are traded on the stock exchange
Interest bearing assets – Include Government bonds, treasury bills, corporate bonds issued by first-class companies and deposits in banks
The Scheme has also invested in property in form of land and buildings.
What rate of interest will my account earn?
Interest will be credited to your Member Account at rates determined by the Trustees after auditing Scheme accounts annually. The rate of interest allocation is based on the investment return achieved by the Scheme.
What happens when the investments loose money?
A segregated investment portfolio has considerable variations in investment yields from time to time. There will inevitably be ‘bad’ times and ‘good’ times.
The trustees have maintained a reserve fund to cushion members against ‘bad’ times.
How will interest be credited to my Member Account?
Interest is usually applied annually pro-rata on the balances of the Member Portion, which includes any AVCs made and Employer’s Portion. The rate having been set by the Trustees based on the net investment yield from the returns on the Scheme assets.
Will my pension increase after retirement?
The Trustees may direct that you buy an annuity that will include provision for annual increases.
TAXATION
Are my benefits taxable?
Benefits are taxable upon exit from the scheme, depending on certain factors. The Government however encourages employees and employers to save by granting certain tax concessions including;
a.)Tax relief on contributions
Retirement savings of up to Kshs. 20,000.00 per month contributed to a registered scheme are exempted from tax. The contributions within this limit are called ‘’exempt’’ contributions. If the sum of these contributions is higher than this limit the amount above the ‘’exempt’’ limit are not ‘’tax-exempt’’ and are called the ‘‘non-exempt’’ contributions. If this is the case, your member portion and employer portion of you member account will be split into exempt and non-exempt contributions.
b.) Tax Relief on Benefit Withdrawals
If an individual withdraws his pension funds as a lump sum upon retirement or work termination, the first Kshs. 600,000.00(or Kshs. 60,000 for each year of service for a maximum of 10 years), is exempt from tax.
If you are aged 50 and above, there is a preferential tax scale. This preferential tax scale also applies if you have been a member of the Scheme for more than 15 years, including a scheme from which you transferred to this Scheme.
c.) Benefits after age 65
Receiving the money in annuities for persons over the age of 65 are completely tax free.
d.)Tax exemption on investment income
The investment income earned by exempt contributions is not subject to tax. For those members who have non-exempt contributions tax will be deducted from the interest earned on their non-exempt contributions when it is credited to their accounts.
OTHERS
Can I change my Nomination of Beneficiary Form?
At any time you are a member of the Scheme you may change or cancel your nomination of beneficiary or beneficiaries to receive the lump sum death benefits. It is important to keep your nominations up-to-date. Any changes should be done by application to the trustees through completion of a new Nomination of Beneficiary (ies) Form.
Can I change any AVCs?
You can adjust your AVCs as you see fit at any time.
Can I assign my member account as a security for loan?
None of the benefits provided by the Scheme can be assigned or used as a security to guarantee a loan to any person. The Scheme Trustees cannot recognize any purported charge or assignment and cannot consider or guarantee loans under any circumstances.
BUT…a prescribed portion of member benefits ‘‘may be’’ assigned and used by the member to secure a mortgage facility on prescribed terms.
Can I withdraw any money from the Scheme?
As long as you remain in the Scheme you must remain an active member and therefore you cannot withdraw any money from your Member Account.
How can I know the Accumulated Credit I have in my Member Account?
In order to help you plan for your retirement, you will be given a statement setting out the value of your Member Account each year. You could however visit the secretariat office at any time to enquire about your balances and they will be able to assist you.
