If you are approaching or are in retirement, you may have the option of setting-up an Approved Retirement Fund ('ARF') into which you can transfer your existing pension fund after your once-off lump sum has been taken.
What is an ARF?
An ARF, where eligible, is a tax-exempt investment fund into which you can transfer the balance of your pension fund after you receive your lump sum and after you have satisfied the AMRF conditions, (as outlined in the FAQ). You may make withdrawals from your ARF (which are taxable).
For individuals that are aged 60 or over for the full tax year, there is an imputed distribution of 5% of the value of the ARF as at 31st December each year. key purpose of an ARF is to provide benefits over the duration of your life from retirement and they should be viewed as long-term investments.
- It is set up to receive transfers from existing types of pensions including:
- PRSAs
- Personal Pensions
- Occupational Pension Schemes (subject to certain restrictions)
- AVC Schemes
- Tax-free investment returns:
- No Capital Gains Tax when you sell your assets
- No Exit Tax when you exit a third party investment fund
- No Income Tax on dividends or coupon payments
- Flexible income withdrawals:
- Income withdrawal subject to income tax (at your marginal rate) and subject to paying tax based on a mandatory distribution of at least 5% each year from the age of 61
The Davy ARF Service:
Click here to learn more about the risks that prospective investors should consider prior to making a decision to invest in a pension or retirement product.
Warning: The value of your investment may go down as well as up