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Boost your retirement savings with flexible, tax-efficient contributions
Grow More. Retire Better.
AVC is an optional top-up to your pension that is flexible and tax-efficient.
Overview
Additional Voluntary Contributions (AVC) is extra contribution made by a member into their retirement savings plan, over and above the mandatory pension contributions. These contributions are entirely optional, flexible, tax-efficient and are designed to help members boost their retirement savings and achieve greater financial security in retirement.
Voluntary
Members choose whether to make AVC and how much to contribute, based on their financial goals and capacity
Flexible Contributions
AVCs can be adjusted, increased, decreased, or stopped at any time, offering flexibility to the contributor.
Tax Benefits
Under the Income Tax Amendment Act, 2024, monthly pension contributions of up to Kshs. 30,000 are tax-deductible, reducing your taxable income on your payslip (PAYE).
Investment Growth
Contributions are invested in your scheme's funds, allowing your savings to grow over time. The AVC contribution will earn annual interest and the compounded each financial year.
Separate Account
AVCs are displayed in a separate account from mandatory pension contributions on your statement, making it easier to track and manage.
Benefits of Making AVC
Tax Efficiency: Save more while paying less tax (PAYE).
Enhanced Retirement Income: AVC help build a larger retirement pot, which can translate into higher income at retirement.
Boost Retirement Income: AVCs help bridge the gap between statutory savings and actual retirement needs.
Financial Discipline: Regular contributions through direct deduction at the payroll encourage saving habits and long-term financial planning.
Early Retirement Planning: Supports goals like early retirement or funding post-retirement ventures.
Accessing AVCs
Upon Retirement
Up to 100% of AVCs may be withdrawn as cash, unlike mandatory contributions which are limited to 1/3 depending.
Upon Resignation
Up to 100% of AVCs may be withdrawn as cash upon resignation or early exit
Accessing AVCs on Retirement or Resignation
Additional Option
AVCs can also be accessed as annuity or income drawdown, depending a member's preferences.
Transfer Option
AVC can be transferred to another registered retirement benefits scheme if you change employers or opt for a different pension provider
Get Started
The earlier you begin making AVC, the more time your savings have to grow. This additional contribution gives you the freedom to shape your retirement future.
Talk to us today to get information on how to start making AVC contribution and take control of your financial journey. You can download the AVC form via the link below, fill and avail the form to the pensions office or write an official request for deduction through your payroll office.
