What’s an Approved Retirement Fund?
An Approved Retirement Fund, or ARF, is a pot for your pension money after you retire.
When you retire, the pension fund(s) you have paid into (perhaps an executive pension, a personal pension, or a PRSA), are available to you. You can then take decisions on what to do with this money.
One of your options is to move your money into an Approved Retirement Fund. It can then be invested in a range of growth assets, such as investment funds. (The other main routes are to take a cash lump sum, or invest in an annuity).
It’s worth noting that you do not have to remain with your existing pension provider when you open an ARF. Moneycube can help you shop around.
How do I get the money out?
You can withdraw money from your ARF over time, either on a regular basis, or in lump sums as you need it.
Once your money is in an ARF, you’re required to withdraw a certain percentage of the fund each year. (4% or 5% depending on your age, and 6% if your ARF has more than €2 million in it).
Anything else I need to know?
Before you can open an ARF, you need to have a guaranteed income of at least €12,700 for life (for example, from an annuity and the state pension). If you don’t have an income like this, €63,500 of your pension fund must go into an AMRF first.
Read on: Tax-free lump sum