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Home Pensions

Maximizing Tax Benefits with CURBS and CPRBS

Faith Ndunda by Faith Ndunda
June 12, 2025
in Pensions
Reading Time: 2 mins read

Retirement planning is not just about securing financial stability for the future, it also comes with significant tax benefits that make saving more rewarding. With the Cytonn Personal Retirement Benefits Scheme (CPRBS) and Cytonn Umbrella Retirement Benefits Scheme (CURBS), individuals and employers can take advantage of tax incentives that reduce taxable income while ensuring long-term financial security.

One of the key advantages of CPRBS is its flexibility in contributions, allowing individuals to save at their own pace. With a minimum contribution of KES 1,000.0 per month, self-employed individuals, freelancers, and professionals can start building their retirement savings without financial strain. CURBS, on the other hand, is designed for employers who want to provide structured retirement benefits for their employees. The scheme requires a minimum contribution of 2.5% of an employee’s gross salary, which is matched by the employer.

On 27th December 2024, the Kenyan government enacted the Tax Laws (Amendment) Act, 2024,  which introduced a major win for savers. The Act raised the tax-deductible pension contribution limit from KES 20,000.0 to KES 30,000.0 per month, equal to KES 360,000.0 annually, up from KES 240,000.0. This adjustment allows individuals to save more for retirement while reducing their taxable income. The increase in tax-free contributions also helps pension savings retain their value amid inflationary pressures, making long-term financial planning more effective.

The Act also introduced new relief for healthcare savings, with the deduction of post-retirement medical fund contributions from taxable income. Contributions to a post-retirement medical fund, up to KES 15,000.0 per month, are now also tax-deductible. Both CPRBS and CURBS offer the option to contribute to this fund, making it easier for members to plan for medical expenses without financial burden.

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Additionally, income earned from registered retirement benefit schemes is tax-exempt for individuals who meet specific conditions. The tax exemption applies to individuals who have reached the scheme’s retirement age, have withdrawn from the scheme due to medical reasons, or have been members of the scheme for at least 20 years before withdrawing. For individuals receiving gratuity, converting it into a pension scheme like CPRBS or Cytonn Income Drawdown Fund (CIDDF) can provide tax advantages. Gratuity, a lump sum payment given upon retirement or completion of service, is taxable upon payment unless transferred into a pension fund. By moving gratuity into a registered retirement scheme, individuals can defer taxation and enjoy structured withdrawals that align with their financial needs.

With these tax benefits, CPRBS and CURBS provide a strategic and tax-efficient way to save for retirement, ensuring financial security while maximizing savings.

 

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Faith Ndunda

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