Income Drawdown Fund

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An Income Draw-down Fund allows a retired member to withdraw their benefits in regular installments while the remaining balance stays invested in the Fund for a minimum of 10 years, subject to an annual maximum withdrawal of 12% of the principal amount (as per Retirement Benefits Authority guidelines). The two-thirds (2/3) Defined Contribution (DC) portion can be used to purchase either an income draw-down or an annuity.

Features of an Income Draw-down Fund:

• Variable Income – Payments depend on the performance of the underlying investments.
• Tax Relief – Income draw-down is exempted from tax.
• Flexibility – Members can choose investments, withdrawal frequency, timing, and amounts.
• Member-Assumed Risks – Investment performance and longevity risks are borne by the member.
• Withdrawal Options – Funds can be withdrawn as lump sums, used to buy an annuity, or paid to beneficiaries upon the member’s death.
• Annual Withdrawal Limit – Members may withdraw up to 12% per year (as per Retirement Benefits Regulations).