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Pensions Reform

Dáil Éireann Debate, Tuesday - 19 October 2021

Tuesday, 19 October 2021

Questions (357)

Kathleen Funchion

Question:

357. Deputy Kathleen Funchion asked the Minister for Finance if monies invested in approved retirement funds which are linked to revenue rather than pension funds will be accessible to persons at age 65 if the retirement age rises to the proposed 68 years of age; and if he will make a statement on the matter. [50403/21]

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Written answers

It is assumed that the Deputy’s Question concerns the rules relating to retirement age and the level of drawdowns from Approved Retirement Funds (ARF).  I am advised by Revenue that there is no link between the age at which a person may access her/his ARF and the age at which a person may receive a State social welfare pension.  Such pensions are a matter for the Minister for Social Protection.

Section 772(3)(a) Taxes Consolidation Act 1997 (TCA) provides that the rules of an occupational pension scheme should specify the age, between 60 and 70 years, at which members will normally retire.  The “normal retirement age” (NRA) may differ for categories of member and may also be agreed on an individual basis.  Section 772(4)(b)(ii) TCA allows benefits to be payable on retirement within ten years of the specified age or earlier on incapacity, if the member’s scheme so provides.

However, an ARF is not a pension fund or pension arrangement. Rather, it is a post-retirement investment product into which an individual may opt to transfer their pension fund on retirement as an alternative to annuity purchase.  An ARF holder may withdraw all funds from an ARF, if s/he has retirement income from outside the ARF in excess of €12,700 per annum.  Withdrawals from an ARF are subject to income tax deduction at source under the PAYE system, which is administered by the ARF provider.

Further information on ARFs can be found in Chapter 23 of the Revenue Pensions Manual, which is available at www.revenue.ie/en/tax-professionals/tdm/pensions/chapter-23.pdf.

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