At PAL Pensions, our mission is simple: to help you plan today for a secure tomorrow.
To leverage the benefits of the pensions scheme aimed at securing your future, understanding the Multi-Fund Structure will help you properly align your Retirement Savings Account (RSA) with your age, financial goals, and risk appetite.
This structure allows for a more personalized and effective pension fund management approach. Whether you are just starting out or about to retire, it grows with you offering the right balance between growth and stability.
The Multi-Fund Structure
Introduced by the National Pension Commission (PENCOM), the Multi-Fund Structure enhances how your pension contributions are invested. Rather than using a one-size-fits-all model, it divides RSAs into five distinct fund types, each tailored to suit specific age groups and investment preferences.
The Various Fund Types
RSA Fund I: For individuals under 49 years of age seeking high growth and willing to take on more risk, up to 75% of their total portfolio value can be invested in variable income instruments. This fund is not assigned by default. Membership of this fund shall strictly be by formal request by the Contributor.
RSA Fund II: For individuals under 49 years of age with moderate risk appetite. A minimum of 55% of their total portfolio value can be invested income instruments. This is the default fund for active contributors aged 49 years and below. Active contributors under the age of 49 years and below can switch to Fund I upon a formal request.
RSA Fund III: Designed for individuals aged 50 years and above, offering lower risk and more stable returns. A maximum of 20% of their total portfolio value is allocated to investments in variable income instruments.
RSA Fund IV: The fund is strictly for retirees. A maximum of 10% of their total portfolio value is invested in Variable Income Instruments. Contributors in this Fund can move only to RSA Fund VI Retiree (Shariah-compliant Retiree Fund)
RSA Fund V: This fund is for self-employed persons operating in the informal sector. The Contributions are flexible and can be paid daily, weekly, monthly, or quarterly. A maximum of 40% can be withdrawn for contingent purposes while 60% will be set aside as retirement savings.
Contributors in this fund can move to Funds I, II, and III should they become employed in a formal sector. Contributors in other funds cannot move to this fund. A maximum of 5% of their total portfolio value is invested in Variable Income Instruments.
RSA Fund VI Active: Designed for active and retiree contributors who prefer ethical, non-interest-bearing Money and Capital Market Products. A maximum of 55% of their portfolio value is allocated to strictly Sharia-compliant Variable Income Instruments.
How to Make the Most of the Multi-Fund Structure
As a PAL Pensions client, here is how you can actively align your retirement goals:
- Under 50? Consider opting into Fund I for higher long-term returns.
- Over 50? You are automatically placed in Fund III but can opt for Fund II based on your financial goals.
- Retired? Enjoy the income stability and safety of Fund IV.
Fund switching is allowed once every year giving you the power to adapt as your needs evolve.
At PAL Pensions, we do not just manage funds we manage futures.
