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END OF SERVICE BENEFIT
The need for Retirement Planning to ensure a comfortable lifestyle in old age has become a topical issue of late. Old age is inevitable and so is a long life span. Every individual today has to contemplate the thought of living for a good 25 to 30years post-retirement, and seriously worry about where the resources to finance such a life span will come from.
Coupled with a breakdown of the joint family system and increasing levels of urbanization, the possibility of running out of income, post-retirement, has become a serious threat.
The objective of any Good Pension Plan is to provide members of the scheme with adequate regular monthly income at retirement and to ensure that members who unfortunately die in-service or disabled have their dependants adequately provided for.
The End of Service Benefits has four benefits that can be obtained under this scheme.
RETIREMENT FUND (PENSION FUND OR ACCUMULATED FUND)
LIFE ASSURANCE OR DEATH-IN-SERVICE BENEFITS
PERMANENT / TOTAL DISABILITY BENEFIT (P.T.D)
ANNUITY PAID-OUT (MONTHLY PENSION PAYMENT)
This fund shares similar objectives with the Special Investment Plan, except that the Pension/Provident Fund will specifically target salary earners who are willing to set up a retirement fund.
Benefits of End of Service Benefit
Alleviates the client’s financial burden by providing the person with substantial cash payment on retirement; and
Guarantees the client and the family total protection of life assurance. In other words, should the client die even a day after the policy becomes operational, the client’s financial obligations for family will still be met.
The following are the salient points that need emphasising:
Specific deposits (5% + 5%), A+ B salary contribution paid into the fund on behalf of the employee which is deductible at source. Where ‘A’ is employer contribution and ‘B’ is member contribution
Death-in-service (also known as Group Life) premiums deducted to provide for three times annual salary benefits
Permanent Total Disability premiums deducted to provide for two times annual salary benefit
The balance on the account is invested at guaranteed (or variable market rate) per year. In the case of guaranteed interest rate, if the annual investment yield is greater than the guaranteed, bonus interest is added to each member’s account
drafting detailed rules featuring the scheme operations
preparation of member information booklets
preparation of administrative procedures
issuing of benefit certificates to each member of the scheme
issuing of annual statement of accounts
prompt settlement of claims
ProvidentLife Assurance Co. Ltd already has custom-made plans, which are carried out by our integrated computer software for other organisations on our books.
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