SanlamAllianz Unveils Income Drawdown Fund to Redefine Retirement for Pensioners

SanlamAllianz Kenya has launched a new Income Drawdown (IDD)  Fund aimed at reshaping how retirees in Kenya access and manage their pension savings, marking a shift from traditional annuity-based retirement models to more flexible, investment-linked income solutions.

The insurer said the product is designed to address the growing need for sustainable post-retirement income by allowing pensioners to continue growing their savings while drawing a regular income. The move is backed by the company’s strong financial position, including a capital adequacy ratio of 283 percent.

Building on its legacy as the first provider of annuities in the local market, the firm is now focusing on the “decumulation phase” of retirement helping retirees manage and utilise their savings after employment—while still administering an average monthly pension annuity payroll of KSh150 million.

Speaking during the launch, Jacqueline Karasha said the fund is structured to ensure retirees maintain financial independence without sacrificing growth potential.

“Retirement doesn’t mean lacking a steady flow of income. With the Income Drawdown Fund, savings continue to grow even as clients receive regular income monthly, quarterly, or annually. It is flexible, reliable, and designed to make retirement years truly rewarding,” she said.

Unlike conventional annuities that convert savings into fixed payments, the new fund functions like an invested pension account. Retirees withdraw periodic instalments while the remaining balance stays invested in market instruments, enabling continued capital appreciation.

Key Features of the Fund

• Competitive Returns: The fund posted a net return of 15 percent in 2024, with investments held under the company’s Deposit Administration Fund.
• Capital Protection: A minimum guaranteed return of 5 percent ensures the investment value does not fall below the original principal, cushioning retirees against market volatility.
• Flexible Payout Options: Members can select payment frequencies and adjust withdrawal terms annually, up to 12 percent of the fund balance per year in line with regulations by the Retirement Benefits Authority.
• Tax Efficiency: Recent tax amendments exempt qualifying payouts from income tax, increasing disposable income for pensioners.

The launch also aligns with broader efforts to expand pension coverage beyond the formal workforce. Through its mobile-based Akiba Plus platform, the company is targeting workers in the informal sector who make up the majority of the labour force by enabling self-onboarding, consolidation of legacy pension schemes, and real-time savings tracking.

The insurer said the initiative is part of a wider strategy to modernise retirement planning by combining digital access, flexible income solutions, and long-term investment growth, positioning income drawdown as an emerging alternative to traditional pension structures.