Defined Benefit Schemes are managed on deposit administration arrangement. NICO Life Insurance sets up an individual fund specially for the employer. All contributions paid by the employer and employees are credited to the fund together with interest.

The following are payment made from the fund:
• The amounts required to purchase immediate annuities for members on retirement or deferred
annuities for early leavers.
• The annual premiums required to insure with NICO Life any lump sum death-in-service benefits,
under a separate policy issued by NICO Life.
• Payment of benefits to members on withdrawal.
• Administration charges.

Pension entitlement
l/50th , l/60th or l/45th of the Final Pensionable Salary multiplied by the number of years of pensionable service.

Commutation of pension/ Cash in Lieu of Pension
At the commencement date of his Annuity a Member may elect to commute for a lump sum;
(a) if his Annuity does not exceed the limit set by the relevant legislation from time to time, the whole of Annuity; or
(b) if his Annuity exceeds the amount in (a), not more than one third of his Annuity.

Retirement ages
The minimum normal retirement age is 55 and the maximum normal retirement age is 70.

Optional pension
A member has the option at retirement to surrender part of the retirement annuity to which he is entitled in exchange for an annuity to be paid to his dependants should they survive him.

Death-in-service benefits
A life assurance benefit of a multiple of a member's annual salary. A refund of the employees own contributions with interest.

Benefits on leaving service
• A refund of the member's own contributions with interest at the rate of 4% per annum.
• Paid-up pension commencing from normal retirement age if member leaves after 5 years of service.
• Transferring of benefits to another approved pension scheme if member leaves after 5 or more years of service.

Contributions
The scheme can either be non-contributory, with the employer alone paying the total required contributions; or contributory, with both employees and employer contributing towards the scheme. The contributions may be paid annually, half yearly, quarterly, or monthly. Under the contributory scheme, employees normally contribute 5% of their salary and the balance is met by the employer.

Eligibility
All permanent employees of the employer aged not less than 18 years; and the minimum membership period to retirement should be at least 5 years.

Actuarial valuation
Every 3 years, the fund is valued to determine the accrued assets and liabilities under the scheme. If the valuation discloses a surplus, the benefits could be improved or contributions could be reduced; and if there is a deficit, contributions could be increased or the level of benefit reduced.

Certificate of membership
Each member will be issued with a certificate of membership as evidence of membership of the scheme.

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