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.

Pension legislation dictates that from age 61 onwards a mandatory annual distribution must be made on all combined ARF's and Vested PRSA's, and tax on these distributions made to the Revenue Commissioners.  The requirements are as follows:

4%: for combined ARF & Vested PRSA holders aged between 61 and 70, with a market value below €2 million

5%: for combined ARF & Vested PRSA holders aged 71 onwards, with a market value below €2 million

6%: for combined ARF & Vested PRSA holders with a market value above €2 million

The imputed distribution valuation date is the 30th November and so a valuation of your fund will be carried out as of that date and 4%, 5% or 6% of this value, where appropriate, will be encashed to meet the Revenue's requirements.  The distribution must be completed and the relevant tax collected on behalf of the Revenue by the 31st January followng the tax year end.

The benefit of this type of investment is that you do 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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