Approved Retirement Fund “ARF”

What is an ARF?

An Approved Retirement Fund “ARF” is an investment fund that allows you to invest all or part of your pension fund after you retire. It allows you to remain invested in the market with the ability to control your investment and take a flexible income in retirement.

On setting up the fund you can transfer all or part of the balance of your pension fund after you receive your retirement lump sum.


What are the benefits?

  • Within the ARF there are more investment opportunities available (unlike Annuities) that offer higher potential returns (equities, property, etc) and protection against inflation for more growth potential during retirement.
  • An ARF allows you to remain invested in the market and gives you more control over how your retirement fund is managed.
  • You can decide on the types of funds you would like to invest in, and the amount of risk you are comfortable with.
  • It enables you to take a flexible income in retirement.
  • ARF capital can be preserved for dependents. The inheritance of an ARF can be deferred until the 2nd death of ARF holder and spouse. The balance of an ARF on the 2nd death is paid to your children.


Withdrawals from your ARF

Pension legislation dictates that from the year you turn 61 a mandatory annual distribution must be made on all combined and tax on these distributions made to the Revenue Commissioners. The requirements are as follows:

    • 4%: for ARF holders aged between 61 and 70, with a market value below €2 million
    • 5%: for ARF holders aged 71 onwards, with a market value below €2 million
    • 6%: for ARF holders with a market value above €2 million


The imputed distribution valuation date is the 30th November.

The benefit of owning an Approved Retirement Fund “ARF” is that you own the fund and you can decide to invest it as you see fit and, in the event of your death, the value of the fund will be passed to your next of kin in association with revenue rules. This is opposed to an Annuity, in which the funds are not passed to your next of kin, and instead cease in the event of your death.

Approved Retirement Fund "ARF"

Changes to the AMRF

Previously, before an individual could take out an ARF (Approved Retirement Fund), up to €63,500 of their fund would have been needed to purchase an Approved Minimum Retirement Fund or AMRF.

At age 75 the AMRF would then be converted into an ARF. If the person had a guaranteed income of over €12,700 per annum including the state pension then an AMRF was not required. The purpose of the AMRF was to help secure an income throughout retirement if you had a guaranteed pension income less than €12,700 a year.


I have an AMRF, how will this impact me?

Your AMRF plan would have automatically become an ARF on 1 January 2022. You will now have additional options as a result of the changeover from AMRFs to ARFs.


   For more details on these changes, click here   


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