MAMCO

Gratuity Investment Fund

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What is the Gratuity Investment Fund

The Madison Gratuity Investment Fund is a product that allows an employer to make adequate provisions to cater for the benefit payment an employee receives at the end of their employment contract.
It’s a gratuity investment fund because its underlying instruments are market linked investments either in the money market or the capital markets.

It is common practice among good employers to offer gratuity as part of the benefit package for their contract staff. However, if the employer does not have a planned regular funding tomeet future gratuity liabilities, they may find it difficult to settle the benefits when they become due for payment. Sometimes serious cash flow problems may arise if more long serving and highly paid contract staff leave at about the same time. Delaying settlement of the benefits in such circumstances would also tarnish the image of the employer which would make it difficult for them to recruit high quality contract staff in future. A responsible and successful employer is one that meets all such obligations in the best manner as they arise.

The gratuity investment fund is established to pay an entitlement at the end of the duration of the staff contracts. It can be funded on a monthly, quarterly, half yearly or yearly installments at the employer’s preference.
If there are any past services benefits that are currently been held in a bank account, these can be transferred by way of a lump sum or instalments over a period of time that can be agreed on, into the gratuity investment fund. In this way, as gratuity liabilities become due, money to meet them can simply be withdrawn from the fund together with the relevant tax payment liable. The gratuity benefit is subject to
tax in the hands of the beneficiary as per prevailing tax regulations.

Is this a pension fund?

No, this is not a pension scheme. Gratuity funds are suitable for contract staff whilst the
pension funds are ideal for long term permanent basis and can only be accessed at a certain age (minimum 55 years). Gratuity funds pay out at the end of a contract.

Who are the managers of the fund?

Madison Asset Management Company Limited (MAMCo) are the fund managers of the
product. Madison brand is a renowned name in the pension and insurance services sectors.
MAMCo was established in 2008 as a stand alone entity to manage the fund management and investment business in line with the group’s strategic vision, to enhance the product offerings to the market and offer a bespoke service to its clientele.

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Head Office

Madison Asset Management Co. Ltd
Unit trusts and Stock broking Services
1st Floor Daresalaam House
P.O Box 37013, Lusaka
Tel:+ 260 211 223023
Fax: +260 211 233936