Multifund
The Multi-Fund Investment Structure (MFIS) is an innovation by the National Pension Commission (PenCom) that provides a framework enabling pension contributors to have a guided say in the choice of the nature of investment assets which their contributions can be invested in.
Inception in 2005, contributors have always been grouped into two, namely, the RSA Fund for active contributors and the Retiree Fund for those who have retired from active service.
The essential difference between the two Funds was that the RSA Fund was allowed to have a higher content of risky assets than the Retiree Fund. The risk content has to do with the percentage of assets in the portfolio with variable incomes.
It is generally believed that the higher the risk in an asset class, the higher the income. On this premise, the argument has been that while some people prefer higher risks so as to predispose them to higher income, there are different levels of risk preference or appetite for different people.
Some people therefore felt that restricting contributors to the above two categories was not fair enough, prompting PenCom to think of ways of increasing the number of Funds to accommodate more shades of contributors.
In line with the above thinking, PenCom has created four different Funds, namely, Fund I, Fund II, Fund III and Fund IV and PFAs are required to transfer, in accordance with the guidelines, contributors in the previous two groups into the newly created four Funds, effective July 1, 2018. The existing RSA (Active) Fund is now to be replaced with Funds I – III, while the Retiree Fund now becomes Fund IV.
Inception in 2005, contributors have always been grouped into two, namely, the RSA Fund for active contributors and the Retiree Fund for those who have retired from active service.
The essential difference between the two Funds was that the RSA Fund was allowed to have a higher content of risky assets than the Retiree Fund. The risk content has to do with the percentage of assets in the portfolio with variable incomes.
It is generally believed that the higher the risk in an asset class, the higher the income. On this premise, the argument has been that while some people prefer higher risks so as to predispose them to higher income, there are different levels of risk preference or appetite for different people.
Some people therefore felt that restricting contributors to the above two categories was not fair enough, prompting PenCom to think of ways of increasing the number of Funds to accommodate more shades of contributors.
In line with the above thinking, PenCom has created four different Funds, namely, Fund I, Fund II, Fund III and Fund IV and PFAs are required to transfer, in accordance with the guidelines, contributors in the previous two groups into the newly created four Funds, effective July 1, 2018. The existing RSA (Active) Fund is now to be replaced with Funds I – III, while the Retiree Fund now becomes Fund IV.
- Subscribers must be below 50 years
- Must request to be moved to this Fund
- Only subscribers in Fund II can move to Fund I
- Will be more aggressive in terms of asset allocation
- More risky assets included and thus, more target returns
- Minimum of 20% of assets will be invested in variable income assets
- Maximum of 70% of assets can be invested in variable income assets.
- Subscribers must be below 50 years and will be moved into this fund automatically except they indicate otherwise
- Can only move to Fund I
- Will be moderately aggressive in terms of asset allocation
- Minimum of 10% of assets will be invested in variable income assets
- Maximum of 55% of assets can be invested in variable income assets
- Returns will most likely replicate the current RSA Fund’s ROI
- Subscribers must be 50 years and above and will be moved into this fund automatically except they indicate otherwise
- Can only move to Fund II [but not Fund I]
- Will be more conservative in terms of asset allocation
- Minimum of 5% of assets will be invested in variable assets
- Maximum of 20% of assets can be invested in variable assets
- This is the current Retiree Fund
- Operated in accordance with guidelines of the existing Retiree Fund
- Subscribers cannot move to Funds I, II or III
- Will be more conservative in terms of asset allocation
- Minimum of 0% of assets will be invested in variable assets
- Maximum of 10% of assets can be invested in variable assets
- Returns will be similar to the existing Retiree Fund’s
Why choose us as your PFA?
Our commitment is to provide safe and rewarding pension services that not only secure the financial future of our beneficiaries but also contribute to their overall happiness and peace of mind, fostering a retirement filled with comfort, joy, and the assurance that their needs are well cared for.
- Experienced professionals providing precise pension fund management.
- Diverse services: retirement planning, fund management, financial advice.
- Consistent, reliable returns for a secure and prosperous retirement.