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Financial Planning

Navigator Approved Minimum Retirement Funds

What are the Approved Retirement and Approved Minimum Retirement Funds? 

The aim of these plans is to allow you to control your retirement fund. Once you reach retirement you may be able to choose what to do with your retirement fund depending on your individual circumstances. One of these options may be an Approved Minimum Retirement Fund (ARF) or an Approved Retirement Fund (ARF).

ARF - The need to knows

  • Before you invest in an ARF you must meet one of the conditions below (unless you have inherited your ARF or AMRF from your spouse or registered civil partner).

You must set aside €63,500 in an AMRF until you reach 75

Or, you must buy a guaranteed pension for life (annuity) with this money (€63,500)

Or, you must have a guaranteed pension income for life of €12,700 a year

  • You are required to withdraw a minimum amount from your ARF every year. This minimum amount is currently 4% from the year you turn 61 (or 60 if your birthday is the 1st of January) and 5% from the year you turn 71 (or 70 if your birthday is the 1st of January) where the total value of your ARFs and Vested PRSAs is less than €2,000,000 (6% otherwise.) 
  • If the withdrawals you have paid are less than this, we will pay you the balance at the end of the year. This withdrawal will reduce the value of your fund.
  • Depending on investment returns it is possible that these withdrawals could result in your fund reducing to zero before you die, the plan would then end.
  • You must take out an AMRF if you have chosen the ARF route but do not have a guaranteed pension income for life of at least €12,700 a year already in place or have not used €63,500 to buy a pension for life. 
  • The main difference between an AMRF and an ARF is that, until you are 75 years old or you become in receipt of the required guaranteed pension income from other sources, you are not required to make a minimum withdrawal from an AMRF each year.

AMRF 

  • You must take out an AMRF if you have chosen the ARF route but do not have a guaranteed pension income for life of at least €12,700 a year already in place or you have not used €63,500 to buy a pension for life ( annuity ) with the fund at any stage during the term of your ARF or your AMRF plan.
  • The main difference between an AMRF and an ARF is that, until you are 75 years old or you become in receipt of the required pension income from other sources. You are not required to make a minimum withdrawal from an AMRF each year.

    Example of how an AMRF and an ARF work  together

     

Your retirement fund

€500,000

Retirement lump sum (for example, 25%)

€125,000

Invest in an AMRF ( if you do not have a guaranteed pension

income for life of €12,700 a year )

€63,500

Invest the rest in an ARF

€311,500

Warning

Suitability Snapshot

We have set out some important points for you to consider to help you decide if this plan is suitable for you. If you are in doubt, you should contact your Ulster Bank Financial Planning Manager

An AMRF plan might suit you if you:

 are looking for a long term investment plan to provide for your retirement

 don't need access to your money before age 60 (or until you retire)

are happy with the choice of funds and the charges on this plan

have at least €1,800 a year to invest

would like to take advantage of the tax relief available on pension contributions.You understand that when you retire, your pension benefits (after the retirement lump sum) are taxed as income.

An AMRF plan might not suit you if you:

are looking for a short term investment plan that won't be used for retirement.

need access to your money before age 60 (or before you retire)

aren't happy with the choice of funds and the charges on this plan

have less than €1,800 a year to invest

you are not paying income tax and cannot take advantage of the tax relief available on pensions contributions

 

Keep track of your money

You can check details of your plan online by visiting the Irish Life website www.irishlife.ie and logging into My Online Services. You will need a personal identification number (PIN), which you would have received when you started your plan. If you have lost your PIN or need a new one, contact our customer service team on 01 704 10 10