Policy is owned by the employer, who makes
contributions on behalf of their employees
Contributions are flexible:
Pay any amount (up to 1/3 of employee's
chargeable income OR 20% of the employee's gross salary, inclusive of other pension and annuity payments)
Pay anytime e.g. monthly or annually
No minimum amounts required
Tax shelter:
Employer contributions are non-taxable to
the employee (subject to 1/3 of chargeable income rule)
No tax is charged on the benefits until
they are withdrawn at retirement
Employee's pension not restricted to 2/3
ceiling of pre-retirement base earnings
*Two investment options:
Declared Interest where there is a
guaranteed minimum rate, no fee or charges, rates are declared annually and
interest earned is compounded annually
Managed Fund which is managed by
professional investment managers and analysts and which uses
contributions to buy units of the fund
* The selection is made by the employee who can
invest in either option or in both.
This investment choice can be
changed once per year on the plan anniversary date.
The employee can also switch past funds, future contributions or both.
