SanlamAllianz Kenya has unveiled its Income Drawdown Fund( IDD), marking a significant shift in the country’s retirement income landscape. The insurer says the new product is designed to offer flexibility, capital protection, and continued growth for retirees navigating the decumulation phase of retirement.
Backed by a market-leading 283 percent capital adequacy ratio, the company is positioning the IDD fund as a modern alternative to traditional annuities.
A Shift from Accumulation to Decumulation
For decades, retirement planning in Kenya has largely focused on accumulation, saving and investing during one’s working years. With the IDD fund, SanlamAllianz is turning attention to the decumulation phase, enabling retirees to draw income while keeping their remaining savings invested.
The insurer, which pioneered annuity products in the Kenyan market, continues to manage an average monthly pension annuity payroll of KSh 150 million.
“Retirement doesn’t mean lacking a steady flow of income,” said Jacqueline Karasha, CEO of SanlamAllianz Life Insurance. “With the SanlamAllianz Income Drawdown Fund, your savings continue to grow even as you receive regular income, monthly, quarterly, or annually. It is flexible, reliable, and designed to make your retirement years truly rewarding.”
How the Income Drawdown Fund Works
The IDD fund operates like a pension bank account that remains invested. Retirees withdraw regular instalments while the remaining balance continues to grow through market-linked investments.
Retirees to Benefit as SanlamAllianz Launches Income Drawdown Fund
The investments are held within the SanlamAllianz Deposit Administration Fund, ensuring competitive returns while offering downside protection.
Key Features of the IDD Fund
•Market-Leading Returns
In 2024, the fund declared a net return of 15 percent, offering retirees the potential for capital growth beyond traditional fixed annuity structures.
•Capital Protection
The fund guarantees a minimum return of 5 percent, ensuring the investment value never falls below the principal amount, even in volatile market conditions.
•Flexible and Tailored Payouts
Members can choose payment frequencies, monthly, quarterly, or annually and revise their withdrawal terms annually, in line with guidelines set by the Retirement Benefits Authority. Withdrawals are capped at a maximum of 12 percent of the fund balance per year.
•Tax Efficiency
Under the Tax Laws (Amendment) Act 2024, monthly payouts and benefits from the IDD fund are exempt from income tax, maximising retirees’ disposable income.
Targeting Kenya’s Informal Sector
Beyond structured pension schemes, SanlamAllianz is also expanding retirement access to the informal sector, which accounts for nearly 80 percent of Kenya’s workforce.
Through its mobile-first digital platform, Akiba Plus, users can self-onboard, consolidate previous pension schemes, and monitor their investment growth in real time. The platform aims to democratise access to professional pension management services.
Transforming Kenya’s Retirement Landscape
With the launch of the Income Drawdown Fund, SanlamAllianz is seeking to redefine retirement by combining flexibility, guaranteed returns, and tax efficiency.
As life expectancy rises and economic uncertainties persist, the insurer says the IDD fund offers retirees a sustainable way to maintain steady income streams while preserving and growing their capital.