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Home Pensions

Cytonn Income Drawdown Fund (CIDDF)

Ivy Mutali by Ivy Mutali
June 3, 2025
in Pensions
Reading Time: 2 mins read

The Cytonn Income Drawdown Fund (CIDDF) is one of Kenya’s tailored solutions for retirees seeking flexibility, security and continued investment growth after leaving the workforce. For pensioners who have built up retirement savings and now require a structured yet flexible income stream, the CIDDF offers a unique alternative to traditional annuity products with a minimum investment of KES 1,000,000.0 and a minimum drawdown period of 10 years after which a member can opt to take the remaining balance as lumpsum or purchase an annuity or continue with drawdown.

At its core, the CIDDF allows retirees to transfer their accumulated pension savings into the fund and draw a maximum of 15.0% of the balance per year while the remaining amount continues to be professionally managed and invested. This mechanism helps retirees avoid withdrawing all their savings at once or locking themselves into a fixed annuity. Instead, they benefit from the ability to adjust their withdrawal frequency and amount depending on their needs.

What sets CIDDF apart is its balance between income and investment. Funds are deployed across various asset classes, including fixed income, which includes government bonds and fixed deposits, and equities, helping preserve capital while still generating returns. This continued investment gives retirees a chance to grow their remaining pension savings, supporting sustainability throughout retirement.

Another strength of CIDDF lies in its flexibility. Unlike annuities, which often come with inflexible payment terms, retirees can modify their drawdown amounts or draw their funds monthly, quarterly, semi-annually or annually ending on their lifestyle and financial priorities. For instance, one may opt for a higher payout during the first few years of retirement and scale down later.

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The fund is regulated by the Retirement Benefits Authority (RBA), which ensures compliance with retirement fund guidelines and protects investor interests. Regular reporting, transparency and oversight add an extra layer of trust and security for retirees relying on the fund for day-to-day needs.

However, retirees must approach income drawdown with careful planning. Since funds remain invested and markets can fluctuate, there’s a risk of depleting the principal if withdrawals exceed the rate of return. Therefore, financial advice is key to determining sustainable withdrawal levels and managing longevity risk.

Ultimately, CIDDF empowers Kenya’s retirees with choice, not just in how much they withdraw, but in how their retirement capital is preserved and grown. For those seeking an alternative to rigid annuity structures and desiring greater control over their post-retirement finances, CIDDF is a compelling, modern solution.

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