COMMERCIAL BANK OF CEYLON PLC

Head office
September 1st, 2014

Domestic Operations Instructions Circular No. 14/04

FUTURE PENSIONS PLAN
1. Introduction
Having identified the opportunities and the need for a new long term
product coming up with the ageing population patterns and the increasing
tendency for people to plan & save for one's own future, the bank has
decided to introduce Future Pensions Plan (FP Plan).
Any Srilankan aged between 18-65 years can join the scheme with a
monthly or lump sum contribution & the depositor will receive a monthly
pension payment up to a period of 15, 20 or 25 years. Additionally, the
depositor will receive an annual bonus payment equivalent to the monthly
pension amount.
th

The product will be launched with effect from 9 September 2014 at all

branches.
2. Eligibility, Salient Features & Operation
2.1.1
2.1.2

Any Srilankan, aged between 18-65 years is eligible to open a Future

Pensions Plan.
There are 5 options available, based on depositors age & method of
deposit
Age between 18 and 54 & deposits monthly a fixed amount up
to the age 55 yrs. Pension payments start from the end of the
following month after the 55th birth day.
Age between 18 and 59 & deposits monthly a fixed amount up
to the age 60 yrs. Pension payments start from the end of the
following month after the 60th birth day.
Age between 18 and 54 & deposits a lump sum. Pension
payments start from the end of following month after the 55th
or 60th birth day.
Age between 55 and 60 & deposits a lump sum. Pension
payments start from the end of same month in which the lump
sum is made.
Age between 60 and 65 & deposits a lump sum. Pension
payments start from the end of same month in which the lump
sum is made.
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The customer/s will have to choose the period, i.e 15, 20 or

25 years, for which the pension be paid. In addition to the
monthly pension payment, an annual bonus payment equivalent
to the monthly pension amount will be paid during the agreed
period of payment.
2.1.3

The pension amount could vary depending on the need & capacity of
the depositor subject to a minimum of Rs. 10,000/- and a maximum of
Rs. 100,000/-.
2.1.4 A free Surgical & Hospitalization Cover for Rs 50,000/- annually up to
the age of 75 years will be available to the depositors under this
scheme, from Union Assurance Plc.
2.1.5 Individual & joint Future Pensions Plans could be opened. Joint Future
Pensions Plans are allowed only up to two depositors and both parties
should be above 60 years of age. If a third party wishes to open an
account on behalf of a senior citizen, such request will be considered
subject to FP Plan being opened in the name of the senior citizen.
2.1.6 In case of the death of the depositor, the nominee/s (assigned by the
depositor/s) will continue to receive the pension & bonus payments
during the agreed period, subject to conditions noted under section
2.5.1. However, the medical benefits will not be available to the
nominee/s.
2.1.7 As this is an annuity scheme, once the final pension payment is paid
no further payments will be made. The FP Plan will be closed by the
branch, thereafter.
2.1.8 At present, annuity products of this nature for senior citizens aged
above 60 years are not subject to With Holding Tax under section
13(w) of the Inland Revenue Act No.10 of 2006. However, the
depositors aged below 60 years may be liable to pay WHT and
accordingly initial lump sum/ monthly deposit to be made have been
calculated considering WHT component.
2.2 Operations
2.2.1

The Future Pensions Plan should be opened in the system under the
Transaction Subsystem as a Savings Account under;
Product name
: FUTURE PENSIONS PLAN
Product No.
: 131

2.2.2

The Future Pensions Plan is governed by standard rules & regulations

for annuity schemes. The usual KYC documents & WHT declaration
form (if the depositor is aged below 60 years) should be obtained. The
Future Pensions Plan mandate (ref. annexure) should be used
(available under downloads on the intranet).
When opening FP Plans, the Consolidated Circular on
WHT on Interest dated 27th January 2014 should be closely followed.
Further, the respective flags should be evoked on the AS400 system
based on customers age & the WHT declaration.
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2.2.3

In order to credit the monthly pension & the annual bonus a new
savings account or a current account can be opened subject to standard
rules & regulations of the Bank. In case of a joint FP Plan, the account
should be in all the joint depositors as in the FP Plan. However, an
existing account in the name of the depositor/s too can be used for this
purpose. This account number should be mentioned in the space
provided in the mandate under Any existing accounts with
Commercial Bank.

2.2.4

The monthly pension amount, the period of payment in years, dates of

commencing pension & bonus payments should be clearly indicated
on the mandate and confirmed by an Officer by placing his/her full
signature.(Please refer section 2.2.12 for calculation of the pension
amount).

2.2.5

The account mentioned in section 2.2.3 could be a joint account with

any other party/ies if the depositor/s wish/es.

2.2.6

The available CIF must be used for existing customers who wish to
open a new account under FUTURE PENSIONS PLAN.

2.2.7

Duly filled nomination form must be obtained at the time of opening

the account & kept together with the account mandate form. In case of
a joint FP Plan, consent & concurrence of both joint account holders
must be obtained for the nomination. As such, both parties must sign
the nomination form. The depositor/s should be informed of the
consequences of nominee being below 60 years of age as highlighted
in section 2.5.1.

2.2.8

Duly filled mandate, nomination form & the certificate issued under
section 2.2.13 with other related documents are to be image scanned &
saved for future reference.

2.2.9

After opening the FP Plan, the scanned mandate (ref section 2.2.8),
should be forwarded to the ICBS-CBA for them to establish the
Standing Orders required for monthly pension & annual bonus
payments. Separate S/O mandates are not required. ICBS-CBA will
establish the S/Os in the Future Pensions Plan effective on 31st of
each month. The system will automatically shift to last day of the
month in case of a month which has less than 31 days.

2.2.10 Monthly pension will be paid (credited) only to the account mentioned
in section 2.2.3, on the 31st of each month. Branch to make sure that
an ATM cum Debit Card is issued to the customer/s, linked to this
account. In any event, ATM cum Debit Cards should not be linked to
the FP Plan.

2.2.11 The bonus payment which is equal to the monthly pension amount will
be paid (credited) annually, only to the account mentioned in section
2.2.3. The bonus payment will start after 12 months from the month of
initial pension payment.
2.2.12 A system query will be available to calculate the required lump
sum/monthly deposit for a given period of deposit, the expected
pension & the period. Initially, Excel based Pension Calculator is
available on the intranet.
http://combank.intranet.com/Pension-CAL

2.2.13 A certificate (format available on the intranet) printed on Banks letter

head, authorized by two officers (including at least one A grade
officer) will be issued at the time of opening the Future Pensions
Plan after the initial / lump sum deposit is made. A signed copy of
same should be attached to the account mandate. The certificate
(please refer annexure) will indicate;
(a) Future Pensions Plan number.
(b) Monthly deposit amount to be made
(c) Lump sum deposit made.
(d) Agreed period of FP Plan.
(e) Monthly pension amount.
(f) Dates of initial & final pension payment.
(g) Date of start of bonus payment.
(h) Number of the account to which the pension will be credited.
(i) Date issued.

2.2.14 In case of a lost, destroyed or stolen certificate a photocopy may be

issued on written request to the depositor/s only, by the branch where
the Future Pension Plan is maintained. This has to be clearly marked
True Copy & signed by an authorized signatory.

2.3 Withdrawals
No direct withdrawals are allowed from the Future Pensions Plan except on
the conditions noted under section 2.5.
Staff should not pass direct entries to Future Pensions Plan in any event
& should place a caution in the system thus Future Pensions Plan - No
Debits Allowed. ICBS department will take necessary steps to avoid such
entries & will generate a print out on a monthly basis, listing the accounts
where unwarranted entries have been passed. Branch should go through the
printout and take necessary steps to reverse such entries, if any, immediately.
Anyhow, such reversals should be back-dated to original date of transaction.

2.4 Statements
An annual balance confirmation will be issued during the contributory period
only. Otherwise, no statements, balance confirmations will be issued except
the certificate issued under section 2.2.10.

2.5 Death of Depositor & Pre-mature Withdrawals.

2.5.1

Death of depositor/s:
1. In case of an individual Future Pensions Plan, the nominee can opt
to leave the FP plan with a lump sum payment equivalent to the
balance available in the FP Plan subject to taxes (if any) OR to
continue to receive the benefits, except medical benefits till the end
of the agreed period subject to nominee being above the age of 60
years. Then, the name in the FP Plan should be changed, to that of
the nominee & a new/existing account in the name of the nominee
will be selected to pay (credit) monthly pension/annual bonus
payments. In such event ICBS-CBA should be informed of the
changes so that S/Os can be amended accordingly.
2. In case of a joint FP Plan, remaining depositor/s will continue to
receive the benefits. The benefits will pass on to the nominee/s
only after the death of all the joint depositors.
3.

If :
(a) Any one of the nominees are between 18 & 60 years of age or
any nominee being a trust/company etc, then the balance in the
FP Plan will be released, subject to taxes(if any), to the
nominees as full & final payment. The basis of sharing will be
according to the original nomination or in the absence of such
indication equally shared among the nominees. In case of a
minor among the nominees, his/her share should be treated as
per section (b) below.
(b) The nominee is below 18 years of age then the balance in the
FP Plan should be transferred to a Minors Savings account,
subject to taxes, if any.

In all events,
The original death certificate should be examined & a
photocopy of same to be kept with the account mandate after
certification by an officer with the remark original seen.
Identity of the nominee/s should be clearly verified & photo
copies of such identification documents kept with the account
mandate.

2.5.2

Pre-mature withdrawals:
If the depositor intends to withdraw from the scheme on
circumstances acceptable to the Bank such as medical expenses,
migration, the request can be allowed subject to approval from the
respective AGM. In such event, the available balance in the FP Plan
will be released only to the credit of the account mentioned in 2.2.3,
after recalculating the accumulated interest, at the prevailing rate
offered on Savings accounts. The interest accrued so far should be recalculated at the prevailing rate of interest for Savings Accounts on
pro-rata basis.

2.5.3

Arrears in monthly deposits:

It is the responsibility of the depositor to ensure monthly installments
are duly paid. If the monthly installments are not paid on the due date,
depositor is required to pay an additional payment of Rs.6/- per every
Rs.1000/- of arrears in installments for each month of delay.

If agreed monthly deposits are in arrears for more than 02 months,

the FP Plan should be converted to a normal Savings Account and
inform the customer/s in writing. The interest accrued so far should be
re-calculated at the prevailing rate of interest for Savings Accounts on
pro-rata basis.
2.6 Special Medical Benefits.
2.6.1 Surgical & Hospitalization Insurance Cover.
The benefits under this cover will be available to all depositors. This
will be a group policy & with an annual cover of up to Rs. 50,000/- per
individual or jointly available through the Union Assurance Plc.
However, this benefit will not be available after the depositor reach the
age of 75 years.
2.6.2 Central Administration Dept. will arrange to pay the premium under
2.6.1 in consultation with Bancassurance Dept. on a monthly basis.
Branches are required to submit necessary details of the depositor/s
such as Name, Date of Birth, NIC no., Account no. etc to CADM
Dept. through Bancassurance Dept. to update the insurer.
2.6.3 Claims should be submitted to the branch where the account is
maintained, on the basis of reimbursement only. All claims will have
to be approved by the respective Regional Manager & then be
forwarded to the Bancassurance Dept. for processing by the insurer.
Claim forms could be downloaded from the intranet site of the
Bancassurance Department.

Procedures for Indoor claim processing.

Requirements (Reimbursement Basis):

In the event of a claim, written notice shall be given to the company

without delay, of the occurrence of any injury or of the
commencement of any sickness in respect or which a claim may be
made.
1.
2.
3.
4.

Claim form
Diagnosis card
Original Hospital Bills, Payment Receipt etc.
All the claim documents have to be submitted within 90 Days

2.7 Risk mitigation

The Bank is aware of the risk involved in fixing the rate of interest @7%
p.a for a period up to 25 years. In order to mitigate such risks it has been
decided to invest in long term SL Treasury Bonds. The Treasury DivisIon
of the Bank will analyze the product portfolio annually and will make
investments, if necessary.

3. Publicity & Promotion

3.1 The Marketing Department will carry out an island wide campaign through
print & visual media. The branches are also expected to use the hype created
by such campaigns to canvass potential customers & corporate clients.
3.2 The product brochure & other advertising material will be available from the
Marketing Department.

S. RAJA OORIYAR,/
ASSIST
T GENERAL MANAGER
(Personal Banking II)

CHANDANA GUNASEKERA
DEPUTY GENERAL MANAGER
(personal Banking)

Annexure

COMMERCIAL BANK OF CEYLON PLC [PQ116]

Branch:..
Date :/../.
Account. No. : ..
.

.
Dear Sir/Madam,
Certficate of Investment- Future Pensions Plan
Lump Sum Deposit made : Rs..
Monthly Contribution
: Rs ..to be made up to --/--/20---Agreed Period of Pension Payment : Years
Monthly Pension Amount : Rs
Pension Amount will be credited to Account No.:..
First Pension Payment due on
: --/--/20----Final Pension Payment due on
: --/--/20--Annual Bonus Payment
: Rs.
Annual Bonus Payment Commences on: ../ / 20__
We confirm that the above account is held with Commercial Bank of Ceylon Plc.,
having its registered office at No. 21, Sir Razik Fareed Mawatha, Colombo 01
(hereinafter referred to as the Bank) and the Bank undertakes to pay you the Agreed
Monthly Pension and the Annual Bonus as stated above.
All payments will be credited to the above mentioned account on the 31st day of each
month.
In case of you selecting the monthly contributions option, please note that failure to
make the monthly contributions continuously for two(02) months will reduce the agreed
Monthly Pension' payment. In such a situation, your Future Pensions Plan may be
cancelled at the discretion of the bank.
As Future Pensions Plan is annuity based, deposits made will not be refunded after
the beginning of Monthly Pension payments. Once the final Pension payment is made
the Bank will carry no further liabilities under this scheme, either express or implied.
In the event of your death, the remaining joint account holder or the nominee/s
appointed will continue to receive the Monthly Pension/Annual Bonus payments up to
the agreed period. It is to be noted that the payment of agreed Monthly Pension and the
Annual Bonus will be made by the bank subject to any taxes and levies imposed by the
Department of Inland Revenue from time to time and applicable at the time of payment.
Thank You for banking with us.
.
Authorized Signatory

..
Authorized Signatory

(This should be printed on a Bank letter head. Please delete clauses that are not applicable including this note
prior to printing)

ForOfficeUseOnly
FBPLANNo.
.

CIFNo.
.
MonthlyPension:Rs..payableover.yrs.
Startofpensionpayment:30/31/__/_____.
AnnualBonus:Rs..
Startofbonuspayment:30/31/__/_____.
.

ManagersSignature Date

TheManager,
CommercialBankofCeylonPlc,

APPLICATIONTOOPENAFUTUREPENSIONSPLAN

PleaseopenaFuturePensionsPlaninmy/ourname/s.I/Weagreetocomplywithandbeboundbytherulesand
regulationsapplicablefortheconductofsuchplan.TheFPPlanwillbeoperatedbymyself/ourselves.TheFPPlanwill
onlybeopenedatthesolediscretionoftheBanksubjecttoconditionsgoverningFPPlans.
Please()theappropriatecage.(PLEASEFILLINBLOCKCAPITALS)
Future Pensions Plan A:
Future Pensions Plan B:
Im below 54 years old & wish to receive benefits after reaching the
Im/we are, above 55 / 60 years old & agree to make a lump sum
investment of Rs.& wish to receive
age 55
or 60
.
Rs. monthly from end of this month, for
I agree to make a lump sum investment of Rs / monthly
15 years with an annual bonus of Rs.
investment of Rs for a period of ..months &
wish to receive Rs monthly for
20 years with an annual bonus of Rs.
15 years with an annual bonus of Rs
25 years with an annual bonus of Rs.
20 years with an annual bonus of Rs
25 years with an annual bonus of Rs

Any existing account with Commercial Bank:

Current Savings
A/C No. ..
(This account will be credited with monthly pension & the annual bonus when due)

Applicant 1:
MR./MRS./MS/DR./REV INITIALSSURNAME.
NAMES DENOTED BY INITIALS
.
ADDRESS
.....
.....
Any correspondence to be mailed to(to be completed only if the address is different to the above)
.....
E-mail address: ..
Date of Birth : ...... NIC / Passport No : .. (Please attach a photocopy)
Phone No : ... Mobile No:....................................................................................
Profession : ..............................................................................................
I am / am not an Income Tax Payer. Income Tax File No :....
Date : Signature :..

Applicant 2:
MR./MRS./MS/DR./REV INITIALSSURNAME.
NAMES DENOTED BY INITIALS
.
ADDRESS
.....
.....
Any correspondence to be mailed to(to be completed only if the address is different to the above)
.....
E-mail address: ..
Date of Birth : ...... NIC / Passport No : .. (Please attach a photocopy)
Phone No : ... Mobile No:....................................................................................
Profession : ........................................................................
I am / am not an Income Tax Payer. Income Tax File No :....
Date : Signature :..

TERMS AND CONDITIONS FOR FUTURE PENSIONS PLAN

1. Business relating to Future Pensions Plans will be conducted by the Bank during normal business hours.
2. Any Sri Lankan (Resident or Non Resident) over the age of 18 to 65 can join Future Pensions Plan.
3. Retirement Benefits will be offered under following categories
a) Age 55 to 65 years - Benefits from the end of same month onwards for 15, 20 or 25 years only,
based on a initial lump sum investment.
b) Age 18 to 54 years - Benefits from the end of following month after the 55th birthday, onwards for
15, 20 or 25 years only based on monthly fixed contribution up to the age of 55 years.
c) Age 18 to 54 years - Benefits from the end of following month after the 55th birthday, onwards for
15, 20 or 25 years only based on initial lump sum investment.
d) Age 18 to 59 years - Benefits from the end of following month after the 60th birthday, onwards for
15, 20 or 25 years only, based on monthly fixed contributions up to the age of 60 years.
e) Age 18 to 59 years - Benefits from the end of following month after the 60th birthday, onwards for
15, 20 or 25 years only, based on initial lump sum investment.
4. EachFuturePensionsPlanholderwillbeissuedwithaCertificateofInvestment,thesafetyofwhichwill
betheaccountholder'sresponsibility.TheBankmustbenotifiediftheCertificateofInvestmentislost,
stolenormisplaced.
5. ThemonthlyPensionPayments&theannualBonuspaymentswillbecreditedtotheaccountmentioned
underAnyexistingaccountwithCommercialBankoverleaf.
6. Retirement benefits should be within the range of Rs.10,000/- to 100,000/-. The contributory monthly
installment/lump sum to be determined accordingly.
7. Monthly installments become due on the joining date of each month. It is advisable to make arrangement
for standing order to ensure regular payment of monthly installments.
8. It is the responsibility of the contributor to ensure installments are duly paid. If the monthly installments are
not paid on the due date, contributors are required to pay an additional payment of Rs.6/- per every
Rs.1000/- of arrears in installments for each month of delay. Retirement benefits shall not be entitled until
the due amounts are paid in full.
9. If the monthly installments are not paid regularly for a period of 02 (Two) consecutive months, retirement
plan will be discontinued and converted to an ordinary Savings Account. The applicable interest rate will
be at prevailing ordinary Savings offered rate.
10. If death occurs during the contributory period, Future Pensions Plan will be terminated. In such a situation
total contribution would be paid back to the nominee or to legal heirs together with interest. The applicable
interest rate will be at prevailing ordinary Savings offered rate, whichever is less.
11. Retired persons (aged above 55 years) can invest their Provident Fund/benefits in Future Pensions Plan and
obtain retirement benefits from the same month onwards.
12. In the event of death of the investor during the agreed pension period, monthly pension/ annual bonus
would be paid to the surviving joint beneficiary or the nominee/s until the completion of the agreed period.
i.e.. 15, 20 or 25 years subject to nominee/s being above 60 years of age.
13. A depositor can join only one (01) Future Pensions Plans. Future Pensions Plan could be opened jointly
only for two (02) individuals subject to both being above 60 years of age.
14. Since Future Benefits Plan is an annuity based investment plan, withdrawals of funds are not allowed.
Further, no money would be paid to the depositor/s or nominee/s or legal heirs after completion of agreed
retirement benefit period.
15. The Bank guarantees the agreed retirement benefits provided the installments have been paid on due dates
together with additional payments (if any).
16. Retirement benefits, under this scheme will be subject to the taxes (if any) prevailing at the time of
payment of such benefits.
17. The Bank reserves to itself the right to alter or add to these rules at any time.

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