Programmed Withdrawals

What is a Programmed Withdrawal?

A Programmed Withdrawal lets retired members collect their pension on a regular basis for the estimated period of their life expectancy.

Features

Regular payments: Pension payments are made monthly for the member’s estimated life span.
Based on your principal: The amount payable is determined by the principal you invest.
Track your funds: You can follow the movement of funds in your PW account at any time.
Adjustable payments: Monthly pension payments can be adjusted to your life expectancy.
Professional fund management: Your funds are placed with a fund manager.

Why choose a Programmed Withdrawal?

You benefit from the interest earned on the principal you invest.
You retain ownership of your funds.
The scheme is transparent, and you can track your investment.
It is flexible and can easily be converted to other retirement options.
If a member dies, benefits are paid in full to the nominated beneficiaries.

Service options

CPS offers personalised services to members joining the scheme. In the first year, members receive a monthly pension of at least 20% of their last net salary before retiring. After that, the pension is adjusted according to the option you choose:

Monthly pension on interest earned only

Access 100% of the interest earned on your investment and leave the principal intact. Interest is paid as pension in the following year.

Pension adjusted by average inflation rate

Adjust your pension annually by the average inflation rate and reinvest all excess funds.

Principal plus interest adjustment

Access part of the principal and a percentage of the interest earned. The monthly amount is calculated by spreading the principal over the remaining 24 years.

Fixed residual amount

Reserve a fixed residual amount to pass on to beneficiaries, or to use as a cushion for reprogramming. Interest on the residual can be used as a top-up during emergencies.

Medical cover and death benefits

To help members get extra value from the scheme, CPS registers all members on a medical scheme with a registered service provider. Medical cover premiums are paid at the start of each year from the interest earned on your investment.

CPS can also take over premium payments for members who are already on a medical scheme, and can arrange cover for members who were not covered at the time of retirement.

On the death of a member, CPS will, within 24 hours and after liaising with the family, pay the deceased’s family an amount equal to 25% of the annual interest earned on the investment to help with funeral expenses.

Risks

The main risk of a Programmed Withdrawal is that a member could outlive their benefits. This is managed by reserving a percentage of the interest earned for reprogramming whenever needed, so that members remain covered for life.

How funds are invested

All member funds are invested in interest-bearing assets at prevailing market interest rates. Interest earned, less withholding tax, is credited to your account and paid to you the following year.

How much will I receive each month?

Before you join, the administrator will show you how the scheme works using the models approved by the regulator. These models estimate your monthly pension based on the principal you invest and a projection of the interest earned. Pension amounts vary according to your principal and the option you select.

Reporting

CPS reports on the performance of the scheme semi-annually. Each report shows your opening balance, interest earned, any expenses, taxes deducted, and your closing balance.

Fees

The administrator charges a fee of 5% on income earned. No fee is charged on your principal amount.

Who can join?

Programmed Withdrawals are open to anyone who wants a more transparent way of managing their retirement benefits and a stable monthly income for life.

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