Early Retirement Benefit
When a member leaves employment after reaching the prescribed early retirement age of fifty-five (55) years, regardless of service, he/she qualifies to go on early retirement. In terms of the Fund Rules, a member also qualifies to go on early retirement if he/she withdraws from the Fund between the ages of fifty (50) and fifty-four (54) years, and has contributed to the Fund for at least fifteen (15) years.

Normal Retirement Benefit

On attainment of the age of sixty(60) years, a member qualifies to go on normal retirement. A member may however opt to defer retirement for a further period of not more than five (5) years.

Late Retirement Benefit

The Fund Rules provide that a member may opt to defer retirement up to the late retirement age of sixty-five (65) years. A member shall not be eligible to continue as a contributing member of the Fund after attaining the age of sixty-five (65) years. Should a member not claim their benefit at the age of sixty-five (65) years, their pension will be classified as an unclaimed deferred benefit and will still continue to accrue interest/bonuses until it is claimed.

Pension Options at Retirement

When going on retirement, it is important to note that a member’s pension will be payable for life. A member will be required to select one of the options below in order to determine how they will receive their pension benefit. Furthermore, these options also have a bearing on the treatment of the pension benefit in the event of the pensioner’s death:

  • Full monthly pension option;
  • One third commutation, plus reduced monthly pension;
  • Full monthly Joint and Survivorship pension; or
  • One third commutation, plus reduced Joint and Survivorship monthly pension

What do the Retirement Options Entail?

One Third (1/3) Commutable Amount

In terms of the Pension and Provident Funds Regulations, a member is allowed to commute a part of their pension up to a third of their total pension accumulation upon retirement. The remainder of the pension accumulation will be reduced to a monthly pension that will be paid to the member for life.

NB: A member cannot opt to be paid a 100% commutation (full pension lump sum) if his/her pension per month is more than the limit prescribed by the Pensions Regulator from time to time. Currently, the limit is USD $480 per annum or its equivalence in local currency based on the prevailing inter-bank foreign currency exchange rate. This means that a pensioner whose annual pension is below USD $480 or its equivalence in local currency based on the prevailing inter-bank foreign currency exchange rate, can choose to be paid their pension accumulation as a once off lump sum.

Pension Guarantee Periods

The guarantee period provides continuity of the payment of pension to beneficiaries in the event of death of the member on retirement (now referred to as pensioner). The guarantee period commences from the date the member goes onto pension. In the event that the member dies within the guaranteed period, the next beneficiary will be introduced on pension and be paid a monthly pension until the end of the guarantee period chosen by the member on retirement. If the pensioner outlives the guarantee period, the pension will cease on the member’s death. Where a Joint and Survivorship option had been selected, and either the pensioner or the designated beneficiary outlives the guarantee period, upon the pensioner’s death the pension is payable to the survivor until they die.

Monthly Pension

  • This can either be a full monthly pension, or can be reduced after commutation of one third of the member’s total pension accumulation. The pension is payable to the member for as long as he/she is alive.
  • If upon retirement a member opts for the full monthly pension option, the commutation option falls away.
  • Regardless of the chosen pension option, the pension is guaranteed for either five (5) or ten (10) years, and thereafter for life. This means that while the member is guaranteed to receive their pension for the rest of their life, payment of the pension to the beneficiaries upon the member’s death will depend on, and be restricted to, the guarantee period of either five (5) or ten (10) years, as chosen by the member at the point of their retirement. In the event that the member outlives the chosen guarantee period, the pension will cease upon his/her death, and no further pension benefit will be payable to beneficiaries.

Joint and Survivorship Pension Option

  • This is an option where the member chooses to cover two (2) lives with his/ her accumulated pension. This results in a lower monthly pension in order to protect his/her chosen beneficiary upon his/her death.
  • This option is taken with a designated beneficiary, for example, a spouse, adult child, brother or sister.
  • Proof of marriage should be submitted in respect of the spouse and proof of age submitted in respect of other beneficiaries.
  • While the member and the chosen joint survivor are guaranteed to receive the pension for the rest of their lives, in the event of their death, continued payment of their pension to the next beneficiary will be subject to the guarantee periods of either five (5) or ten (10) years.


Requirements for Processing Retirement Benefits

  • An Advice of Withdrawal Form (Form BN1) should be completed by both the employer and the member, and be submitted to the Fund for processing. In the event that an employer is no longer in existence, members are advised to contact the Fund for assistance.
  • A copy of the member’s National Identification Document (National ID Card, Valid Passport or Driver’s License).
  • A copy of the member’s last payslip showing year-to-date figures must be submitted for tax assessment purposes.
  • Upon receipt of the member’s pension claim, the Fund will issue a letter of pension options to enable the member to select the pension option of their choice.
  • After selection of the pension option, a completed copy of the pension option letter and a BN2 Form (used to capture a Retiring Members’ Personal Details) should be submitted to MIPF before payment of the pension can commence.