Approved Retirement Funds (ARFs) are part of the flexible options at retirement introduced in Finance Act 1999 to provide control, flexibility and choice to the holders of personal pension plans and to proprietary director members of occupational pension schemes, in relation to the drawdown of their retirement benefits.
In order to avail of an ARF, members aged under 75 are required to demonstrate guaranteed income of €12,700 per annum, including State pension. If income is less than €12,700, the individual must transfer €63,500 of their retirement fund to an Approved Minimum Retirement Fund (AMRF) or purchase an annuity to bring up their level of income to this amount. The purpose of the AMRF is to ensure that an individual, without the minimum guaranteed pension income for life, has a capital nest-egg to provide for the latter years of his or her retirement.
On foot of changes to the AMRF arrangements which were introduced in Finance Act 2014, with effect from 1 January 2015, AMRF owners can draw down up to 4% of the value of the fund assets on one occasion annually until he or she either meets the guaranteed pension income requirement or attains the age of 75, at which point, the AMRF automatically becomes an ARF and any remaining funds can be drawn down at the owner's discretion.
EU Directive 2014/49/EU on Deposit Guarantee Schemes (DGS) protects depositors in the event of a bank, building society or credit union authorised by the Central Bank of Ireland being unable to repay deposits. The DGS is administered by the Central Bank of Ireland and is funded by the institutions covered by the scheme.
The DGS protects:
- Depositors if a bank, building society and/or credit union authorised by the Central Bank of Ireland is unable to repay deposits;
- Eligible deposits up to €100,000 per person per institution;
- Current accounts, deposit accounts, share accounts in banks, building societies and credit unions.
The Irish DGS protects deposits held at EU branches of authorised Irish institutions. Deposits held with credit institutions that are authorised in another European Economic Area Member State are covered by that country’s deposit guarantee scheme.
Deposits by pension and retirement funds are excluded from the coverage of the DGS. By way of derogation from that exclusion Member States were permitted to include certain personal pension schemes. Following transposition into Irish law, DGS Regulations (S.I. No 516 of 2015 – Part 4 Regulation 10(1)(k)) state that, other than an exception for Small Self-Administered Pension Schemes, deposits by pension or retirement funds are excluded from any repayments by the DGS.
Pending any further changes to the European Directive to include retirement schemes, I have no plans to revise the current implementation of the Directive in Ireland.