ANNUITY / PENSION FOR LIFE
When you retire you can use your retirement fund to buy an annuity. This is a guaranteed income from your pension fund after you retire. This income is paid on a regular basis for the rest of your life.
APPROVED RETIREMENT FUND (ARF)
When you retire you can invest your retirement fund into a personal investment account called an approved retirement fund. You can withdraw money from the account when you need it.
APPROVED MINIMUM RETIREMENT FUND (AMRF)
When you retire, if you do not have a guaranteed pension income for life of €12,700 a year, and you are not buying an annuity, you must leave €63,500 invested in your Vested PRSA as a restricted fund or invest this amount from your pension fund into a personal investment account called an AMRF.
These limits may change in the future.
ADDITIONAL VOLUNTARY CONTRIBUTIONS (AVCS)
Extra contributions you can pay into your PRSA to add to the pension benefits already available from your company pension scheme.
A bond is a type of loan given to a company or a government. Say for example a government wants to raise money, they can issue a bond. If you loan money to a government you get your money back after the set timeframe and you will also receive a fixed interest rate.
Raw materials or basic agricultural products that can be bought and sold in recognised markets. Examples of commodities include oil, gas, gold, wheat and cattle.
CHOSEN RETIREMENT DATE
The date you want to retire and take your pension benefits. Your chosen retirement age must be between age 60 and 75.
CONSUMER PRICE INDEX (CPI)
A measure that examines the change in prices of particular household goods and services, such as transport, food and medical care.
Investing in equities means investing in companies on the stock market, and the investor becomes a shareholder.
For the purpose of the funds that invest in shares, as described in this booklet, we are the investor and so the shareholder. How those companies perform affects whether the price of units in the fund rises or falls.
Bonds issued by governments. These 39 governments regularly pay a fixed rate of interest for a set period of time, after which the initial investment is returned.
A fund that is index-linked means it tracks the performance of a particular stock- market index, rather than investing in specific assets that the manager believes will do better.
The rate at which the general level of prices for goods and services increases, and as a result, the buying power of money falls.
When a bond is rated investment grade, the government that issued it (the bond issuer) is considered to be able to meet its obligations, exposing investors to a reduced level of risk.
The grade a bond is rated as is based on a number of criteria, including the likelihood that the bond issuer will be able to pay interest and repay the amount you originally invested, in full and on time.
These are also known as single contributions, as these contributions are not paid into your PRSA plan on a regular basis and can often be different amounts of money.
PERSONAL RETIREMENT SAVINGS ACCOUNT (PRSA)
Personal retirement savings accounts are a type of pension plan introduced in 2002. PRSAs are available to everybody up to the age of 75, whether they are employed, self-employed, work at home or on a temporary career break. They are convenient, flexible pension plans that you can take with you if you move jobs.
Return means the money or the profit you make on an investment. However, if markets do not perform well, your return could be less than the amount you invested. In other words, return means the profit or loss you make on your investment over a period of time.
Contributions you pay into your PRSA on a regular basis (for example, every month or every three months). These regular contributions are usually a set amount of money for a set period of time.
When an investment manager lends securities owned by its clients to a third party.
A unit-linked fund combines your money with money from other investors and buys units in a fund. The number of units you get depends on how much you invest and the price of the units at the time you buy.
A Vested PRSA is
- a PRSA where the PRSA customer has taken their retirement lump sum and left the rest of their fund invested in the PRSA; or
- a PRSA where benefits have been paid from the main scheme (in the case of a PRSA where additional voluntary contributions (AVCs) have been paid).
The potential ups and downs that a fund may experience. The more volatile a fund is, the more likely it is to experience ups and downs that could have a significant effect on the value of your retirement fund.