Post Retirement Planning /Pension post retirement
Approved Retirement Fund (ARF) .
Approved retirement funds (ARFs) are retirement contracts in which you can invest all or part of your pension fund and from which you can then draw an income as you see fit.
They are available to:
- proprietary (5%) directors (who are members of an approved company pension scheme)
- other members using their AVC funds
- PRSA and personal pension holders.
The finance act 2006 introduced an imputed distribution on ARF assets with effect from 31 December 2007. This was then amended in the 2011 Finance Bill. This means that if no funds are drawn down during the year, the ARF holder will be assumed to have drawn down 5% of the fund, with income tax payable. This applies to all ARFs set up after April 2000 where the ARF holder is 60 years of age or older. Any actual distributions from the ARF during the year will be deducted from the imputed distribution for that year. The Finance Bill 2012 introduced imputed distribution on vested PRSA’s and introduced a 6% imputed distribution rate for ARF’s and vested PRSA’s of €2,000,000 or more in value.
A self-directed ARF gives you complete control of your pension investment decisions. The main benefit however is that on death, the value of your fund can be passed on to your estate unlike with annuities, where the contract expires.
Approved Minimum Retirement Fund (AMRF) .
Approved minimum retirement funds are very similar in nature to an ARF but they act as a safety net for individuals which is required by the Government, in that you are not allowed to withdraw any of the original money invested until you reach the age of 75. At age 75, the AMRF converts into an ARF and you can withdraw from it as you see fit.
To find out more about the retirement plan that suits you, please contact Declan Keegan or Sheila Cassidy on 0449330729 or email info@ckfinancials.ie.
PRSA Personal retirement Savings Account .
Planning properly at retirement is vital and all options should be considered including the option of breaking your pension into a number of PRSA’s ahead of retirement and then retiring out each PRSA at different intervals throught your retirement. This can help secure the maximum fund to be pass to your estate on your death if you have not yet used the fund yourself.
