Members of defined benefit (DB) pension schemes who have the option of putting funds accumulated under their DB scheme into an Approved Retirement Fund (ARF) on retirement are required, as is the case with members of defined contribution pension arrangements, to invest those funds in an Approved Minimum Retirement Fund (AMRF) or use the funds to purchase an annuity in certain circumstances.
Where an individual chooses the ARF option, is under the age of 75 and does not meet the requirement of having a minimum guaranteed pension income for life of €12,700 per annum in payment, he or she is required to set aside an amount of €63,500 (or the remainder of the pension fund if less than €63,500 after taking a retirement lump sum) by investing the amount in an AMRF or by the purchase of an annuity. 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 I 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.
I have no plans to alter these provisions.