SanlamAllianz Kenya has launched a new Income Drawdown (IDD) Fund aimed at reshaping how retirees access their pension savings, providing a flexible alternative to the traditional annuities for retirees seeking longevity and control.
The insurer said the fund is designed to allow pensioners to continue growing their retirement savings while drawing a regular income, positioning it as an alternative to conventional annuities that typically provide fixed payouts
Backed by a capital adequacy ratio of 283%, SanlamAllianz said it is seeking to strengthen its role in the post-retirement market, where it already manages an average monthly annuity payroll of Sh150m.
Jacqueline Karasha, chief executive of SanlamAllianz Life Insurance, said the product addresses the decumulation phase of retirement — the period when savers begin to draw down their accumulated pension benefits.
“With the Income Drawdown Fund, savings remain invested and continue to grow even as retirees receive regular income, whether monthly, quarterly or annually,” she said. “It is flexible, reliable, and designed to make your retirement years truly rewarding.”
The IDD fund operates like a pension bank account that remains invested. It allows retirees to withdraw regular instalments while the remaining balance continues to grow through market investments.
Under the structure, retirees withdraw instalments from a pension pot that remains invested through the company’s Deposit Administration Fund. The firm said the IDD fund posted a net return of 15% in 2024.
The product includes a minimum guaranteed return of 5%, which the company said ensures the investment value does not fall below the principal amount invested, offering protection against market volatility.
Payouts can be adjusted annually, subject to Retirement Benefits Authority guidelines, with withdrawals capped at 12% of the fund balance per year. The insurer added that, under the Tax Laws (Amendment) Act 2024, monthly payouts and benefits from income drawdown funds are exempt from income tax.
Beyond formal sector retirees, SanlamAllianz said it is also targeting Kenya’s large informal workforce through its mobile-based savings platform, Akiba Plus. The platform allows users to self-register, consolidate existing pension schemes and monitor savings growth in real time.
The launch comes as pension providers increasingly look to diversify retirement income options amid rising life expectancy and shifting regulatory frameworks that encourage flexibility in how retirees access their savings.
