(CMR) The Department of Labour & Pensions (DLP) has announced that the annual disbursement of funds under Retirement Savings Arrangements (RSA) has increased from $12,900 to $14,125, which is a 9.5% increase.
The National Pensions Act permits members to access their pension benefit at retirement, either through an annuity or an RSA and the amount a person can withdraw annually is calculated according to the member’s age and account value.
The Director of Labour & Pensions, Bennard Ebanks, said, “In consultation with the Board, I am pleased to have approved another increase as it means more funds are accessible annually to our seniors who may need it to maintain their households. As prices rise we hope this increase helps to offset the Islands’ increased cost of living.”
According to the consumer price index issued by the Economics & Statistics Office (ESO), inflation rose 6.6% from the last period when the RSA disbursement figure increased by 3.3% in April 2022.
Minister for Border Control & Labour Hon. Dwayne Seymour, MP, said, “There is a belief that retired persons can only withdraw $1,000 a month, and this isn’t true. The amount a person can withdraw is based on a calculation of their age and the amount in their account. “
“I support this increase as it’s important that we take care of our seniors and those most vulnerable in our community. With access to a larger payment, we hope it makes them become more confident in supporting themselves. This is just one of the government’s initiatives demonstrating its commitment to holistically evaluating pension matters,” Seymour said.
In the guidance notes issued by DLP, it states that the age is defined as the age of the member at the start of the calendar year in which the payments are being made. A retired person can withdraw any amount up to the annual maximum based on their age and account value.
Additionally, they always have the option of terminating the RSA and transferring their balance to an approved annuity, or if they are 89 years or older, they have the option of taking the full RSA account balance with a written notice of at least 60 days.
All applications received from 1 January 2023 and all approved RSAs are entitled to the new maximum figure, $14,125, at their next disbursement.
Since the new figure comes into effect on the 1st of July 2023, members that received their annual disbursement from the 1st of January to the 30th of June should be provided a subsequent payment for the difference between the new and previous RSA figure of $12,900 per annum. If you have queries relating to the new RSA increase, contact your Pension Plan administrator.