Your current investment income may cover your household expenses today but it is likely to cover only half of your household expenses five years from now and the position will get worse as time goes on.
MCB-Arif Habib Savings and Investments Limited (MCB-AH) has recognized that the investors need to maintain their basic lifestyle over time. That’s why MCB-AH has introduced Income Payment Plan which will help you maintain your purchasing power over time. Income Payment Plan is especially suitable for retired persons and those dependent on income from investments.
At the retirement age, the participants under the Voluntary Pension System have the option to buy an Approved Annuity Plan from a life insurance company or an Approved Income Payment Plan from a Pension Fund Manager.
Income Payment Plan which is also known as Income Drawdown Plan provides an option to the participant to defer purchasing an annuity (an income for life) until several years into retirement. The Plan allows receiving a regular income from the accumulated balance in the Individual Pension Account over the term decided by the participant while it stays invested with the Pension Fund Manager.
Income Payment Plan avoids purchasing an annuity until the age of 75 by leaving accumulated balance invested in a range of assets. Participants must recognize that all investments involve varying levels of risk. The portfolios of the Sub-Funds consist of market-based investments and are subject to market fluctuations and risks inherent in all such investments and the value of Units of the Sub-Funds can fall as well as rise. It should also be noted that future annuity rates could be lower or higher than those available today, Income Payment Plan maintains the risk on the investor as opposed to a traditional pension annuity where the investment risk is taken on by the insurance company offering the annuity. The participants should read the Offering Document carefully to understand the investment policies, risks and tax implication and should consult legal, financial or tax adviser before opting for the Income Payment Plan.
Income Payment Plan offered by MCB-Arif Habib Savings and Investments Limited is as follows: