Approved Retirement Funds

This is an investment plan that offers you almost total control of your pension fund following retirement and allows you to invest it in a wide variety of investment types. You will need to make important investment decisions on your fund in retirement and Paul Ryan is suitably experienced to provide the appropriate advice. Under recent pension legislation, controlling Directors of companies and self-employed persons along with employees of companies are now in a position to control their pension funds in retirement by using an ARF and AMRF and therefore they are not obliged to buy an annuity (Fixed Pension) from an Assurance company. Increasing the legislation is changing to allow in some circumstances employees of companies into the ARF and AMRF pension rules.

Under the rules of an ARF you can leave funds invested in the tax-free fund and draw income (taxable in the normal way) as you wish. Any unused portion of the funds on death in retirement will be available to your next of kin, although there may be tax liability dependent on the value of the estate. Under the recent changes in the pension legislation you are required to take an imputed distribution which applies to the value of assets in an Approved Retirement Fund. This imputed distribution has gone from 3% to 5% from the 31st of December 2010. In a nutshell the minimum you need to take out of your ARF is 5% of the value of the fund per annum. The imputed distribution increases to 6% if your total assets are above €2 milllion.

The benefit of this type of investment is that one does not have to lock in returns at interest rates on the date of retirement like you have to undertake when you purchase an Annuity.

Paul Ryan Pension & Financial Consultants Ltd. is regulated by the Central Bank of Ireland.

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