When you retire, you will have three options for receiving your retirement benefits: an annuity, a retirement income fund or a retirement savings arrangement (RSA).
If you choose the Annuity option, all of your Silver Thatch Pensions investment will be cashed in and the money used to buy an annuity. There are different types of annuities available, but in all cases an annuity guarantees you a fixed income for a period of time.
The amount of your annuity income will depend on a number of factors, such as the amount of money available to purchase the annuity, your age, the type of annuity you buy, and interest rates at the time of your annuity purchase.
If you have a spouse at the time of your retirement, your annuity must (by law) include a joint and survivor benefit. This will ensure that if you die before your spouse, the annuity will continue to pay your spouse a fixed, lifetime benefit.
The National Pensions Law was implemented in 1997 and the RSA (Retirement Savings Arrangement) is a payment plan which is in use until the system reaches maturity. RSAs are used so that members who have retired (minimum age 55 years) and wish to access their retirement funds can do so, without having to purchase an annuity or have the uncertainty of income created by a RIF (Retirement Income Fund).
RSAs are payments which are made on a regular basis (either monthly or annually – it’s up to you) in accordance with a payment schedule issued by the National Pensions Office. The payment schedule acts much like a pension envisaged by the law, in that it escalates by 2% annually until all funds are exhausted, and any balances remaining on death are to be paid to the spouse, children/or estate. Currently the first year RSA payment is capped at CI$12,000, if you have less than that amount in your account your whole account will be paid out to you in the first year.
Additionally, members may collapse their RSA at any time and purchase an annuity.
It is mandatory that upon early retirement, all contribution sources (Mandatory, Additional and Voluntary) are included in the RSA Arrangement. On Normal and Late Retirement only Mandatory sources are required to be included and you can choose to elect to redeem the voluntary sources as you wish.
If your balance is under 5k
If at retirement the value of your Silver Thatch Pensions investment is less than CI$5,000, then your account can be cashed out without having to select any of the retirement benefit options.
If you have Additional Voluntary Contributions (AVCs)
Once you are past the normal retirement age (currently set at 65) you may also access all or part of your AVCs by making a request in writing to Saxon Pension Services. But bear in mind that your application could take up to 45 days to process.