Once you reach retirement you may be able to choose what to do with your retirement fund depending on your individual circumstances. Your options may include an Approved Minimum Retirement Fund (AMRF) or an Approved Retirement Fund (ARF), or both.
So what are ARFs and AMRFs?
ARFs and AMRFs are investment funds into which you can transfer some or all of your pension fund at retirement instead of using that fund to purchase an annuity. With ARFs and AMRFs you can manage and control your retirement fund and can invest it in a wide range of different investment funds. You can also take withdrawals from your ARF as you need them. Any withdrawals from your ARF and AMRF will be subject to income tax, PRSI and USC. And because you own the ARF and AMRF, you can leave it to your dependents when you die.
How do they work?
With AMRFs and ARFs you re-invest your pension fund and take the money out when you need it. Before you invest in an ARF you must meet one of the following requirements
- Be in receipt of a guaranteed pension income for life of at least €12,700 a year (this can include the State Pension), or
- Have invested €63,500 in an AMRF, or
- Use at least €63,500 to purchase an annuity, or
- Have reached age 75.
AMRFs are similar to ARFs except you can only make one withdrawal a year up to 4% on an AMRF. Once you reach age 75 or if you start receiving a guaranteed pension income of at least €12,700 a year your AMRF will become an ARF.
From the year you turn 61 Irish Life as a qualified fund manager (QFM) is required to deduct tax from your ARF as if you had taken a withdrawal of 4% of the value of your fund (5% if over 71 or 6% if your total fund values are above €2,000,000).
In December each year if you haven’t taken any withdrawals or if the withdrawals you have taken are lower than 4%, we will pay you a balancing amount to bring your total withdrawals up to 4% of the value of your fund. We will pay the withdrawal less income tax, PRSI and USC to you.
More information is available in our ARF and AMRF brochure.