Small Self Administered ARF's - Common Questions

We have outlined key details below which relate to Self Administered Approved Retirement Funds. For more information, please call us on 01-4546730 we would be happy to try to help you.

What is a Self Administered Approved Retirement Fund (ARF)?

This acts in the same way as a normal Approved Retirement Fund (ARF) but it gives you a more flexible platform for your pension at retirement. It allows you more control of your pension and the investments held within the pension. The Self Administered ARF allows you to make investment decisions on your pension directly. It also gives you a transparent indication of charges and other costs. In our opinion its one of the most cost effective retirement platforms for individuals with a larger pension pot at retirement. 
Self Administered Approved Retirement Fund (ARF) allows full investment control and the ability to control payments in the form of benefits taken without having to use an insurance company. You need a Qualified Fund Manager to arrange your Small Self Administered ARF. For example the Self Administered ARF allows you to sit investment options such as direct properties, shares and bonds into your fund.

What is the difference between Self Administered Approved Retirement Funds and Approved Retirement Funds?

There is not a great difference between a Self Administered ARF and a traditional ARF other then the fact that a traditional ARF is usually taken out with an insurance company who act as the Qualifying Fund Manager. Often insurance companies offer their suite of fund options that they have on their platform for you to choose to invest your pension funds. This is the most common type of ARF but we believe that this type of pension limits the flexibility of your investments as you are sometimes forced to use the products offered by the insurance company managing your ARF. In some situations this is the right vehicle but for other individuals a Self Administered ARF may be a better solution.
By choosing a Self Directed ARF you have direct control over the fund. Regarding fees usually a commission is taken or agreed with your advisor under the "insured arrangement" when using an insurance company. In a Self Administered Approved Retirement Fund ARF we agree a flat fee which can be much more cost effective for you as the client. It’s a more transparent way of having an ARF in our opinion.

What is an ARF?

An ARF is an Approved Retirement Fund which is a pension investment plan that you enter following your retirement from certain types of pension plans. It lets you invest it in a wide range of investments and it can be taken out with an insurance company or with a Qualified Fund Manager. We offer both services at Paul Ryan PFC. You can access the ARF in retirement and draw down money as you need it in the form of income from the investment. Important investment decisions need to be made with every ARF and we would always advise that you work closely with our team in Paul Ryan PFC who are heavily experienced when selecting a fund for your ARF. In our opinion "ADVICE" is essential when contemplating an ARF at retirement.

Who is eligible for an Approved Retirement Fund (ARF)?

In general and under Irish pension legislation all controlling directors of companies and self-employed persons are in a position to control their pension funds in retirement and are often not obliged to buy an annuity (Fixed Pension) from an Assurance company. The ARF allows individuals to leave funds invested in a tax-free manner and then draw income (taxable in the normal way) as they wish. If you die an unused portion of your funds are transferred and made available to the next of kin. We believe that the legislation will be changed to allow all individuals access to ARF benefits in the coming years. However if you feel you would like to explore the possibilities of an ARF then we also offer pension products called PRSA's that will give you access to ARF benefits. You really need the right advice when you are considering a pension and especially at retirement and therefore we would strongly suggest you contact our ADVICE TEAM in Paul Ryan Pension & Financial Consultants for more information. You really only get one chance to make the correct decision! 

What happens to my ARF if the fund is above €2 million?

If your total value of assets within your ARF are above €2 million, then the imputed distribution increases to 6% per annum.

What are the benefits of an ARF?

The benefit of an ARF is that it currently allows an individual the freedom of not having to lock in returns like you do in other pensions in retirement. It also gives people the freedom to control their pension in retirement. There are a number of benefits associated with taking out an ARF, they are as follows:

  •  Capital Preservation, you only have to access 5% of your fund per annum.
  •  Income Flexibility: Income can be varied between 5% and 100% giving you more control of your income in retirement.
  • Defer Annuities (income for life): You can defer the purchase of an annuity to a later date. Annuity rates can differ and the ARF option allows for flexibility. At Paul Ryan PFC we don’t believe the majority of annuities are value for money. However we assess the merits of an annuity on a case by case basis.
  •  Capital and Income are rolled upwards on a tax free basis. Only when you decide to draw income will you be taxed at the normal way.
  • You have the flexibility to access property and investment deals
  •  An ARF allows you to some degree to control your own destiny in retirement.

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

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