From the editor’s desk

Be ready to take advantage of what phased retirement can offer by finding out how it works. If you are a member of

a pension plan offered by your employer, this issue's Better Life newsletter will answer your questions on what op-

tions you have on the retirement savings you have been contributing to.

Be sure to take a look at the measures that apply to your situation and consult our customer service desk to find out

more about your options.

Read 9 Ways to Prepare for Retirement info arti-

cle that gives simple ways to save up for your

retirement. It just might encourage you to talk

about it with your employer or start saving up for

your retirement.

We all aspire to live a comfortable lifestyle.

The transition from working life to retirement is major step for

all workers. In all likelihood, your years of experience and the

expertise you have acquired make you a reference person in

your workplace. So why not use the time remaining until your

last day on the job to make the transition from being a worker to

being a retiree by being both? With phased retirement, you have

that option.

Inside…….

Late Retirement Vs. Normal Retirement

10 way to prepare for Retirement

UAP Retirement Benefits Update

UAP Individual Pension Plan

Better Life NEWSLETTER

ISSUE 3 | MAY 2013

UAP Life Assurance Limited

Quarterly newsletter

Late Retirement vs. Normal Retirement

Late retirement holds more returns than early retirement, which can be an expensive endeavor. Those opting for

the earlier alternative are forced to save significantly more than their mainstream counterparts. Late retirement

can lead to a stock-pile of disposable income. This, of course, depends on what scheme the policy holder chose

earlier in life. Despite having years of accumulated cash, a retiree has a limited amount of time to enjoy it. Money is their biggest as-

set. They just have to live long enough to fully exploit its benefits.

Life expectancy in Kenya is about 63 years. Males average at 62 years while females have a life expectancy of 65. This means that

early retirement can rack up a lot of expenses depending on how soon a person decides to close shop. So when you’re planning for

your retirement, take note of the fact that it will probably cost you more than you expect, regardless of what path you choose. Weigh-

ing your options will help you rationalize your expectations.

For those within a few years or months of retirement, there is the proposed NSSF Bill. If it is passed, it will allow them to earn their pension like a monthly income. This will ensure that retirees spend their pensions in increments as opposed to the current lump sum which can be lost as fast as it is earned. For any young person with time still on their hands, the best they can do is save and invest as much as they can, before it’s too late.

So, if you are thinking about retiring and are fortunate to be participating in a pension plan. If you are considering taking late retirement, reach out to your employer and find out if you can take advantage of phased retirement.

Phased retirement is when you continue working after your normal retirement age, you receive part of your retirement benefits, whilst still contributing to a pension plan.

Depending on the existing agreement you have with your employer, if you are at least 55 years of age but under 65, if your plan authorizes it, you can make an agreement with your employer to withdraw a certain amount from your account — a phased retirement benefit — while continuing to work full-time or part-time.

The agreement must set out the calculation and payment methods for your phased retirement benefit. This can be either as a way of income draw down or annuity from a registered provider.

Life expectancy in Kenya is

about 63 years. Males

average at 62 years while

females have a life

expectancy of 65. This

means that early retirement

can rack up a lot of

expenses depending on

how soon a person decides

to close shop.

10 Ways to Prepare for Retirement Financial security in retirement doesn’t just happen. It takes plan-ning and commitment and, yes, money.

Facts

Fewer than half of us have calculated how much we need to save for retirement.

30 percent of private industry workers with access to a retirement plan do not participate

On average we spend 15 years in retirement

Start saving, keep saving, and stick to your goals

If you are already saving, whether for retirement or another goal, keep going! You know that saving is a rewarding habit. If you're not saving, it's time to get started. Start small if you have to and try to increase the amount you save each month. The sooner you start saving, the more time your money has to grow. Make saving for retirement a priority. Devise a plan, stick to it, and set goals. Remember, it's never too early or too late to start saving.

Know your retirement needs

Retirement is expensive. You will need about 75 percent of your preretirement income lower earners, 90 percent or more – to maintain your standard of living when you stop working. Take charge of your financial future. The key to a secure retirement is to plan ahead.

Contribute to your employer’s retirement savings plan

If your employer offers a retirement savings plan, sign up and contribute all you can. Your taxes will be lower, your company may kick in more, and automatic deductions make it easy. Over time, compound interest and tax deferrals make a big difference in the amount you will accumulate. Find out about your plan. For example, how much would you need to contribute to get the full employer contribution and how long would you need to stay in the plan to get that money.

Learn about your employer's pension plan

If your employer has a traditional pension plan, check to see if you are covered by the plan and understand how it works. Ask for an individual benefit statement to see what your benefit is worth. Before you change jobs, find out what will happen to your pension benefit. Learn what benefits you may have from a previous employer.

Consider basic investment principles

How you save can be as important as how much you save. Inflation and the type of investments you make play im-portant roles in how much you'll have saved at retirement. Know how your savings or pension plan is invested. Learn about your plan's investment options and ask questions. Your investment mix may change over time depending on a number of factors such as your age, goals, and financial circumstances. Financial security and knowledge go hand in hand.

Putting money away for retirement is a habit we can all live with. Remember…Saving Matters!

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3. If you're not saving, it's

time to get started. Start

small if you have to and try

to increase the amount you

save each month. The

sooner you start saving, the

more time your money has

to grow.

Our Vision

To be Africa’s revolutionary financial services company.

Our Mission To enhance quality of life by delivering peace of mind and financial freedom through an exceptionally motivated

team that delivers what customers want

Our Values We are passionate about our work - and it shows!

We do what we say and say what we do. We build life long relationships.

We are a pleasure to deal with.

Don't touch your retirement savings

If you withdraw your retirement savings now, you'll lose principal and interest and you may lose tax benefits. If you change jobs, leave your savings invested in your current retirement plan, or roll them over to an individual pension plan or your new employer's plan.

Ask your employer to start a plan

If your employer doesn't offer a retirement plan, suggest that it starts one. There are a number of retirements saving plan options available. Your employer may be able to set up a simplified plan that can help both you and your em-ployer.

Put money into an Individual Retirement Account

You can put KShs 3,000 or more a month into an Individual Pension Plan (IPP); you can contribute even more if you are 50 or older. You will enjoy various tax advantages. When you open an IPP, you have two options – to contribute the amount before tax or contribute the amount after tax. The tax treatment of your contributions and withdrawals will depend on which option you select. IPP’s provide an easy way to save. You can set it up so that an amount is automatically deducted by check off or bank account and deposited in the IPP or send your contributions via Mpesa.

Budget on the back end

Create a budget you can stick to just before you retire. After years of creating new budgets as your net worth grew more and more positive, you should be a pro at making budgets by now. This is not to say that you have to look forward to living frugally for the rest of your life, just wisely. What is it you've always envisioned yourself doing when you retire? If it's travel, then cre-ate a travel category as a monthly expense in your retirement budget. If it's spending time with your family, then create a "spoil the grandkids" category.

Ask Questions

While these tips are meant to point you in the right direction, you'll need more information. Ask questions and make sure you understand the answers. Get practical advice and act now

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UAP Retirement Benefits Fund Update

Through active management, the UAP Life’s guaranteed fund has achieved the highest 11 year average yield thus:

We confirm that we are very optimistic of competitive returns now and in the future. This is backed by some of the posterity measures we have undertaken to ensure sustaintainable future returns. We have partnered with various private equity funds, who have injected up to 4.7 bill in the business to strengthen UAP Group’s balance sheet to finance its real estate projects and to support its planned African expansion. Half a bill has been invested directly in UAP Life to shore up our investments. In addition our fund managers are only paid management fees purely based on a minimum threshold returns.

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

Returns UAP Life :

Market Average :

UAP Individual Pension Plan What is the UAP Individual Pension Plan (IPP)? The UAP Individual Pension Plan provides benefits based solely on amounts contributed, plus interest earned. The main objective of this scheme is to help individuals save for their retirement. The plan is registered with both the Retirement Benefits Authority (RBA) and the Kenya Revenue Authority (KRA) hence members can enjoy tax benefits. How it works

You will contribute an amount of money, which is then invested towards building your retirement fund.

The contributions may not necessarily be a proportion of your income. However, it is advisable for you to contribute a per-centage of your earnings (subject to a tax deductible limit of 30% of salary/earnings) so that your ultimate benefits would re-flect your previous earnings to help preserve the standard of living you enjoyed before retirement.

Contribution payments can be made monthly, quarterly, half yearly, annually or on ad hoc basis to suit your income streams. You can choose to pay the contributions through personal cheque, standing orders to your bank to deduct and remit to us contributions, direct debit authority to allow us debit your account with the contribution amount, payroll deduction from em-ployer and cash payments receipted at our head or branch offices. Anyone who is employed or self employed may open an IPP with UAP Life Assurance: If you belong to a group pension scheme which is sponsored by your current employer, you can also supplement that with an IPP. Tax benefits available to you - The money invested in your IPP reduces your taxable income and hence less tax is paid out of your gross income. The maximum tax deductible on contributions is the lesser of KShs 20,000 per month (240,000 per year) or 30% of your pensionable income. How the money is invested - Total contributions and past returns are guaranteed by UAP Insurance. The funds in the individual pension accounts are invested in a guaranteed fund which ensures that your accumulated contributions plus interest are pro-tected from capital erosion. Why the UAP Individual Pension Plan • It is flexible to suit your ability to contribute towards your retirement savings • Tax benefits both at the time of contributions\savings and also when cashing in the final benefits • The Minimum guaranteed interest rate of 4% per annum. If the declared rate is higher than 4% we will pay the higher rate. The difference in guaranteed interest and declared interest is paid as a bonus to all clients. • Annual fund value statements issued to all clients. • Contributions may be increased at the discretion of the client without giving prior notice. • It is portable and can be transferred to another scheme of a client’s choice, subject to terms and conditions • Premiums can be paid as single lump sum or at regular intervals. • May provide a financial cushion when a member looses their job\income • Invaluable tool for disciplined and long term savings for retirement • The IPP will enable you as a retiree to be self-supporting The plan is backed by UAP’s AA Credit rating by the Global Credit Rating of South Africa

If you belong to a group pension

scheme which is sponsored by your current employer,

you can also supple-ment that with

an IPP.

UAP is the leading insurance and financial services company in East Africa and Central Africa, its headquarters is in Nairobi and a

network of branches spread across Kenya. Regionally, it is the second largest insurer in Uganda and the first foreign underwriter in

Southern Sudan.

Contact us on:

UAP Life Assurance Limited Bishop Gardens Towers,

Bishops Road P O Box 23842 - 00100

Nairobi, Kenya Tel: 254 020 2850300 Tel: 254 020 2719030

Email: life@uaplife.com Website: www.uap-group.com