The AMRF is no more! How will this impact me?

The Finance Bill 2021 introduces changes to Pension rules


The Finance Bill 2021 was signed into law in December 2021. It introduced a number of significant changes to pension rules, including the removal of the AMRF (Approved Minimum Retirement Fund). These changes were based on some of the recommendations detailed in the report produced by the Inter-Departmental Pensions Reform & Taxation Group (IDPRTG).


There are both positive and negative potential implications to come from these changes for clients who are retiring or who have already retired, as will be discussed below…

In general, however, we welcome these changes as the associated restrictions on AMRFs were regarded by many as no longer fit for purpose.


What was an 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 pensioners secure their income throughout retirement by protecting them from drawing too much income from their pension funds, if they had a guaranteed pension income less than €12,700 a year.


What has changed?


1. The AMRF requirement will no longer apply at retirement  if you are looking to avail of the Approved Retirement Fund (ARF) option from Occupational Pension Schemes, Personal Pensions (Retirement Annuity Contracts), Personal Retirement Savings Accounts (PRSA’s), and Personal Retirement Bonds.


2. Legislative rules and conditions applying to AMRFs were repealed with effect from 1 January 2022 – and Fund Managers cannot accept any assets into an AMRF after 1 January 2022.


The AMRF requirement will longer apply at Retirement if you are looking to avail of the Appr

At retirement, you will no longer need to meet the following requirements:


  1. Have a guaranteed pension income of €12,700 a year.
  2. Invest €63,500 into an AMRF.
  3. Keep €63,500 as a restricted fund in a vested PRSA.
  4. Use €63,500 to purchase an annuity (pension income for life


Additional changes made, as follows:


  1. The death in service options available from company pension plans have been expanded to allow for the deceased’s spouse to invest in an ARF as an alternative to a spouse’s annuity.
  2. The restriction which prevented those in company pensions with their employer for more than 15 years from transferring to a PRSA has been removed. Other requirements still apply when transferring to a PRSA.


I have an AMRF, how will this impact me?


The changes will impact many clients who held AMRF policies – for example those who, until now, did not satisfy the guaranteed income requirement (€12,700) and/or those who due to their age (under 66) meant that they were not yet in receipt of state pensions.


It will also impact, in some cases, those who had reached state pension age but did not receive the maximum rate of state pension and meet the threshold of €12,700 – for example, due to gaps in their Pay Related Social Insurance (PRSI) record.


On 1 January 2022 your existing AMRF plan automatically became an ARF, and the legislative rules applying to ARFs now apply to these former AMRFs.


I have a vested PRSA restricted fund, how will this impact me?


What is a vested PRSA?

It is a PRSA where the Retirement Lump Sum has been paid out and the residual fund remains in the PRSA rather than transferred to an AMRF. 


The above changes to AMRFs also apply to vested PRSAs:

The restricted fund requirement is now removed from your vested PRSA.  This change will give you greater flexibility regarding your withdrawal options.


Options at Retirement


The requirement to purchase an AMRF for those without a guaranteed income of €12,700 has now been removed.

As a result, should you choose the “ARF Option” for your residual fund, you can now allocate the entire residual fund (after the Retirement Lump Sum is paid) to your ARF – or to a number of separate ARF policies – or to a combination of ARF and/or Annuity.

You may also take the residual fund as a once-off taxable cash payment.


Withdrawals from ARFs:

Withdrawals from ARFs


Prior to 1 January 2022, the maximum withdrawal that was allowed from an AMRF was 4% per annum. Given the recent changes, if you previously held an AMRF policy, you may be tempted to take large withdrawals or fully encash the policy.


This may be essential in cases of illness or financial hardship, but be advised that significant withdrawals or full encashments may result in early surrender penalties and will likely be taxed at your marginal rate of income tax, USC, and PRSI (where applicable).


When a full encashment is made in any given year, this could result in a higher tax on those funds when compared with taxation where the funds are withdrawn on a gradual or phased basis over a number of years.




  1. The removal of AMRFs now allow for simplified post retirement options.
  2. This will give more flexibility in accessing your pension fund, and your withdrawal options.


A Caution:


  1. The requirement to draw an annual income from your entire pension may may have implications on the expected longevity of the fund in retirement. Here, consideration should be given for the investment decisions made in relation to your income requirements.


Impartial Financial Advice


Contact us for Financial Advice

You may have additional options and possibilities as a result of the changeover from AMRF to ARF.


For advice in understanding your available options, speak to our Financial Advisors who will be able to guide you appropriately.



Need to speak to a Financial Advisor?

Fill out your details and enquiry below, and one of our Qualified Financial Advisors will get back to you shortly.

Should I start a Pension?


We’ve often heard expressions along the lines of: “why save money for later” or “investing in pensions is gambling”. While these represent the thinking of a certain portion of the population it is important to understand that by putting away a certain amount each month you can make your money work smarter, faster and go much further allowing you to live the life you want in retirement. In the following, we point out four reasons why you SHOULD bother with a pension…


1. Tax Relief on Pension Contributions


The state doesn’t want to be responsible for you when you’re going on month long cruises around the Mediterranean in retirement, therefore they allow any payments towards your pension plan to offset your income tax bill. The maximum percentage of your income you can claim relief on, depends upon your age (Click here for an illustration). And the contributions you make benefit from the THREE tax breaks:


  1. You can claim tax relief on contributions at your higher tax rate (20 or 40%).
  2. No tax on investments growth within you pension fund.
  3. When you want to retire you can then take 25% of your final sum tax free & up to 4% per annum thereafter to fund your income post retirement.


The closer you are to retirement age, the greater the percentage of your income you can contribute. If managed correctly you can fund, receive a retirement income and earn investment growth all tax free. This underpins the importance of receiving good advice when managing your pension!


2. Choose When To Retire!


Currently the qualifying age for the Irish state pension is 66 years old. This will inevitably increase with time due to the ageing Irish population & increases in longevity. If you do wish to retire earlier or would maybe just like to have the option to do so in the future, funding a private pension is the way forward. Maybe you would like to take a step back from work in your early sixties but keep your toes in your work for much longer. By funding a private pension and sticking to the plan, this can become a reality.



3. You need Income in Retirement


People often forget that your income is your most important asset! Pre-retirement, a decent portion of your disposable income (money left over each month after your fixed expenses) will likely be going towards the things you enjoy doing on the weekend, or a going for a quick trip across the pond every now and then. Then all of a sudden you realize you have more wrinkles than you ever remember having, you have left your employer for good, retirement has snuck up on you without having planned how and where you will receive the same level of income that has supported you throughout the many years. To plan for retirement you will need to know where your income will come from.


€248.30 per week or €12,911.60 per year is what the Irish government is giving to retirees in 2021 to do with as they please. If you were used to a much higher income & would like to still go out to your favourite fancy restaurant at the weekends (Covid Depending), you will need to have another source of retirement income. For most people, a private pension plan is the way how. Revenue limits on your pension income allows for up to 4% per year tax free to be drawn down which will help supplement your state pension.

This handy Pension Calculator will show you how much you need to start saving NOW to receive your preferred income in retirement.


Did someone say Retirement Plan? A good place to start planning is to look at your current monthly income (after tax) and ask yourself what ideal amount you would like to receive on a monthly basis in retirement to maintain your preferred lifestyle.


This handy Pension Calculator will show you how much you need to start saving NOW to receive your preferred income in retirement. Next, contact your Financial Advisor (right here if you don’t have one), simply discuss your current financial situation, and a solution that best suits your retirement goals and he or she will regularly check in with you to ensure that you are maintaining them.


4. We’re all living longer – Irish people especially!


Nowadays, people are leading more active lives in retirement. Living longer certainly sounds appealing as it gives us more time to accomplish our goals in life like visiting the places we’ve always wanted to and enjoying our everyday hobbies. Although positive, this also brings with it the challenge of having enough financial resources to see it through.


According to the 2019 Key Health trends published by the department of Health in Ireland, over the past decade we have added 3 months per year to our life expectancy with the overall mortality rate having reduce by 10.5% since 2009. This shoots Ireland above the EU average as living longer than our European neighbors. Life expectancy on average will now see men living to 78 and women to age 83. Long term care is an expensive business for the elderly, and so by planning now for sufficient income in retirement will ensure that you don’t have to be a financial burden on your family.


So where to from here?

Which pension option is best suited for me?


The earlier you start contributing to your Pension, the better off you will be in retirement! Most people find that paying into a pension is not the highest priority. And that makes total sense given that more important financial obligations come first such as mortgage or rent bills, insurance premiums, other loans to pay off, and not to mentioned putting food on the table at the end of the day.


However, after these mandatory expenses and if you have a few quid left over each month, consider regularly putting some away into your own private pension. You will thank yourself later in life! 


The best option for you depends on your personal circumstances.

If you need guidance on how prepare for the retirement YOU want, the best place to start is to seek advice from a Qualified Financial Advisor.


Need to speak with a Financial Advisor?

Fill out your details and enquiry below, and one of our Qualified Financial Advisors will get back to you shortly.