Schemes can continue tax-free upon retirement
PEOPLE who have a defined contribution pension will in future be able to keep their pension fund invested tax-free when they retire, the Government said yesterday.
This is because from next year those with a defined contribution scheme will be able to put their pension fund into an approved retirement fund (ARF).
An ARF is a tax-exempt investment plan that can be invested in a range of products and will provide for your retirement needs.
To qualify for one of these you must have a pension or an annuity of at least €12,700 a year.
Where this is not the case the individual must invest €63,500 in an Approved Minimum Retirement Fund or he can use the €63,500 to buy an annuity from an insurance company.
Being able to put your pension fund into an ARF means you do not have to buy an annuity as soon as you retire, but instead can wait until later while your pension fund is invested tax free.
Giving people with defined contribution schemes an opportunity to buy an ARF has long been called for by pensions experts.