Pensions Background
The National Pension Scheme Authority (NAPSA) was established in 2000. It operates a Defined Benefit Scheme where the benefits are determined by a formula. Upon retirement members receive monthly pension for life.
The scheme has a minimum pension that is increased every January in line with wage inflation
Pension Eligibility
NPS (Amendment) Act No. 7 of 2015
The basic requirement for a pension is 180 months of contributions (15 years). If a member does not qualify for a pension, they get a lump sum.
Effective 14th August 2015, pensionable age for members of NAPSA was revised as follows:
- Early retirement age – previously 50 years, now 55 years
- Normal retirement age – previously 55 years, now 60 year
- Late retirement age – 65 years
- Members who joined the scheme after 14th August 2015 can claim their benefits at 55, 60 or 65 years
- Members who joined the scheme before 14th August 2015 can claim their benefits at 50 and 55 years OR can claim at 60 or 65 years
- Continued payment of the pension is dependent on annual submission of a pension life certificate
Formal Sector Benefit Types and EligibilityNAPSA provides the following benefits
Normal Retirement Pension
- Payable at 55/60 years
- 15 years of contributions
- Late retirement payable at 65 years
Early Retirement Pension
- Payable at 50/55 years
- 15 years of contributions
- Pension should exceed minimum pension
Invalidity Pension
- Any age
- 5 Years of contributions (At-least 12 contributions in 3 years preceding invalidity)
- Declared medically unfit by a medical board
Survivors Pension
- Member or Pensioner dies
- Spouse and Child under age 18 are paid
- Children under age 25 in formal education
- An unborn child of the deceased (in utero)
- Child of any age disabled by age 18 and at death of the member
- In the absence of a spouse(s) and children, a lump sum is payable to the administrator of the deceased’s estate
Funeral Grant
- Atleast 12 contributions in the last 3 years (not applicable to survivor’s pension claims)
Informal Sector Benefit Types and EligibilityNAPSA provides the following benefits
Normal Retirement Pension
- Payable at 60 years
- At least 10 years of contributions (120 months)
- Late retirement payable at 65 years
Early Retirement Pension
- Payable at 55 years
- At least 10 years of contributions (120 months)
- Pension should exceed minimum pension
Invalidity Pension
- Below retirement age
- At least 5 Years of contributions (60 months)
- At-least 12 contributions in 3 years preceding invalidity
- Declared medically unfit by a medical board
Survivors Pension
- Member or Pensioner dies
- Spouse, Children and entitled beneficiaries are paid
- Children or entitled beneficiaries under age 25 in formal education
- An unborn child of the deceased (in utero)
- Child or entitled beneficiaries of any age disabled by age 18 and at death of the member
- In the absence of a spouse(s) and children, a lump sum is payable to the administrator of the deceased’s estate
Family Funeral Grant
- Paid on death of contributing member, registered spouse, children and entitled beneficiaries
- At least 12 contributions in the last 3 years (not applicable to survivor’s pension claims)
- Paid to maximum of 6 registered children under the age of 18 and up to 25 for those in school
Maternity Benefit
- At least 12 contributions in 3 years preceding date of delivery
- Claim should be made within six months from date of delivery
- 24 months between pregnancies
Access to credit
- Minimum 12 months membership to NAPSA
Weather Index Insurance Benefit
- A member will contribute K50 per year towards the Weather Index Insurance Benefit
- Benefit payout only made when crop failure is caused by adverse weather