DrawDown Account

DrawDown Account

This is a retirement plan that gives retired members or their dependents a monthly income if they meet a certain criteria for full withdrawal. The monthly payments will continue, provided that there is money in this account or until the DDA holder passes on, whichever comes first.

The DDA holder is the person who decides to use his/her savings to buy this product and is the active recipient of the monthly payments.

The monthly payment is based on the principal purchase amount set aside by the retiring member or their sole dependents, to buy a DDA and the relevant conversion rate based on the age of the retiring member or sole dependent at the time of purchase.

When can you purchase a DDA?

A member can choose a DDA when, he/she:

  1. Has reached the age of eligibility;
  2. Is medically unable to return to work;
  3. Is the only nominee for a member who has passed away;


What are the benefits of the DDA?

DDA is a tax-free investment that pays interest. It enables account holders have access to their money while receiving their monthly payment.



Interest Bearing

The DDA will earn a Board-approved interest on the principal amount and reduced balance annually. As long as the FNPF Board approves, interest is added to the principal amount and the reduced balance at the same rate that is announced for contributing members every year.


DDA gives the holder more freedom by allowing him/her:

  • To take partial withdrawal out of his/her balance once a year, 12 months after your first monthly payment.
  • To take subsequent once a year withdrawal, 12 months after the last partial withdrawal.
  • To take out a full lump sum 12 months after you get your first monthly payment.
  • Once you apply for a full withdrawal, you can’t take it back, so you have a given one month to change your mind. Or you can ask to waive this waiting time to access your funds.

DDA Payment Plan

DDA holders have the following payment options:

Standard Payment Option: A DDA payment plan with lower conversion rates based on age, which means smaller monthly payments that can be spread out over a longer time.

High Payment Option: A DDA payment plan with higher aged-based conversion rates that lets a larger monthly payment stream be spread out over a shorter period of time.

Minimum Monthly Payment – DDA holders to receive a minimum monthly payment of fifty dollars ($50.00);

Maximum Principal Amount – DDA purchase amount for a DDA must not exceed one million dollars ($1,000,000.00).


Monthly Annuity Calculation

The monthly payment is worked out by multiplying the principal purchase amount chosen by the retiring member or their only dependent by the age-based conversion rate and dividing by 12.

DDA Conversion Rates

DDA conversion rates are based on age and are set by actuaries.

Once bought, the monthly payment amount will not change, no matter what happens in the future.

AgeStandard Payment PlanHigh Payment Plan
55 and below6.30%8.10%
70 and above8.70%14.60%

Change in Conversion Rates

The actuary will review the DDA conversion rates on a regular basis, but any changes will only affect new DDA purchases.


DDA Nomination

DDA holders can choose more than one person or institution as his/her nominee(s). The person who owns the DDA must set aside 100% (100%) of the money for his or her nominee (s).

When the DDA holder dies, their nominee(s) are entitled to a lump sum payment equal to their share of the DDA balance as per allocation.

If there is only one nominee, that person can choose to keep getting monthly payments until the money runs out.

If the following are true, money will be sent to the High Court:

  • There was no nomination choice
  • The nominee died before the DDA holder
  • The nominee is under 18 years old, and
  • The nomination is invalid.

So, if you want your money to go to the person you choose, you must make a formal nomination at the time you exercise your retirement option. When all of the money has been paid out, payments stop.

Renewal Certificate

Six months after you buy a retirement product (such as an annuity, a DDA, or a life annuity), you need a renewal certificate.

The renewal certificate will be sent to the registered mailing address of the retiree payee. It must be received by the Fund before the due date or all monthly payments will stop. Only when the renewal certificate has been signed, certified, and shown as proof of life will these monthly payments keep coming. Six months after the monthly payments start up again, the next renewal certificate will be due.

Payment options

All payments will be made by electronic funds transfer to your bank, unless you live in the outer islands where you don’t have access to a bank. Payment is due every month on the 14th or 28th.

After signing up for DDA, you will get your first payment one month later.