# Options for self admin pension fund at retirement ?



## olddog (31 Jul 2007)

Having searched this forum a fair bit I find lots of good stuff relating to setting up self admin pension funds ( is this the same as a S A R T ? ) but have not managed to find much about what the options are on retirement and after retirement.

I cant believe that there are no threads on this.

I would be grateful for any links which could be posted on the topic

Thanks

Old ( and soon to retire ? ) Dog


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## South (31 Jul 2007)

There is only one option really!

Take 25% tax-free and transfer the rest to an ARF.


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## Homer (1 Aug 2007)

South said:


> There is only one option really!
> 
> Take 25% tax-free and transfer the rest to an ARF.


 
The above answer assumes you're a 5% director of the employer sponsoring your pension scheme.

If not, your maximum permitted tax free lump sum will be determined by reference to your salary, service and age at retirement up to an overall maximum of 1.5 times final salary at normal retirement age.  The balance can be used to buy an annuity, with any AVC element also being ARFable.

Even if you are a 5% director, you can always opt for this latter approach if it gives a more favourable result.

Regards
Homer


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## South (1 Aug 2007)

I would generally think that somebody is unlikely to have their own self-administered fund (which this sounds like) unless they are a 5% director.

_If not, your maximum permitted tax free lump sum will be determined by reference to your salary, service and age at retirement up to an overall maximum of 1.5 times final salary at normal retirement age. The balance can be used to buy an annuity, with any AVC element also being ARFable._

What Homer has outlined (in italics here) is how Occupational Scheme Benefits must be treated at retirement for employees (other than 5% directors)...whether the Occupational Scheme is self-administered or not is irrelevant.


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## LDFerguson (1 Aug 2007)

On the broader issue, it is possible to have a self-administered ARF to maintain control of your pension fund post-retirement if you so wish.


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## olddog (2 Aug 2007)

<background>

Yes, I'm a " greater than 5% director "

Our PF investment decisions are made by ourselves

/<background>

What is an ARF and what are the rules concerning one ? ( as a dog I feel bad about asking this question )

My understanding is that whatever I dont take as cash on retirement ( I doubt that I should be taking any - I have no need ) can somehow be invested as before ( free of tax ) but a certain small percentage of the fund value must be drawn out ( and considered as income for tax purposes ) each year.

Can anyone confirm or deny this ?

I believe that the answer to LDFerguson is 'yes'. Anyone care to confirm this ?


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## South (2 Aug 2007)

It would usually make sense to take the 25% tax-free, even if only to invest it...you don't get too many chances to escape the tax-man, so when you do it may be make sense to take it!

You will be obliged to withdraw 3% of the ARF each year (another reason to take out the 25% tax-free), if you do not withdraw 3% then you will be taxed on an imputed withdrawal of 3% anyway so you may as well withdraw it.


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## LDFerguson (2 Aug 2007)

*



			What is an ARF and what are the rules concerning one ? ( as a dog I feel bad about asking this question )
		
Click to expand...

*

* Thank God there isn't a retirement product for Withdrawal Of Ordinary Funds (or W.O.O.F.) so. *

*From http://www.citizensinformation.ie*

*Approved Minimum Retirement Fund*

You may take up to 25% of the fund as a lump sum (tax-free). Then you must set aside at least 63,486.90 euro of the fund and place it in an Approved Minimum Retirement Fund (AMRF). This fund may not be drawn down to less than 63,486.90 euro until you reach 75. This obligation to invest in an AMRF will not be imposed if you have a guaranteed pension or income for life from a state pension, annuity or occupational pension of at least 12,697.38 euro per annum (this is called the minimum income requirement).
*Approved Retirement Fund*

After investing in the AMRF, you can then simply take the balance of the funds or you may invest them in an Approved Retirement Fund (ARF) or a number of such funds. If you take the funds, you will, of course, have to pay tax on them. An ARF can be any fund, including a bank account, in a regulated financial institution. Income tax is payable if you draw down these funds. 
From 2007-2009 a tax on those parts of the fund which are not drawn down will be phased in. The tax will be 1% in 2007, 2% in 2008 and 3% in 2009 and will apply to ARFs created on or after 6 April 2000. 



> I believe that the answer to LDFerguson is 'yes'. Anyone care to confirm this ?


 
Actually it was a statement, not a question.


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## olddog (2 Aug 2007)

LDFerguson said:


> *
> *
> 
> (...On the broader issue, it is possible to have a self-administered ARF to maintain control of your pension fund post-retirement if you so wish ...)
> ...



( Sorry, making my usual mistake of not reading posts properly )

At any rate, THAT is great news !

Any suggestions as to where I find the rules & regulations on this ?

South, I guess withdrawing 25% tax free is good for some. In my situation I find the tax exempt status of an ARF much more useful.


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## South (2 Aug 2007)

Withdrawals from an ARF are not tax-free, so it usually makes sense to get the money out tax-free when possible!


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## LDFerguson (2 Aug 2007)

> Any suggestions as to where I find the rules & regulations on this ?


 
[broken link removed] of the Revenue pensions manual deals with ARFs.  If you like reading this sort of thing, the full manual is downloadable from [broken link removed].


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## olddog (2 Aug 2007)

Thats a useful link, many thanks.

I'm denser than usual today so this may be obvious but when you say :

"it is possible to have a self-administered ARF to maintain control of your pension fund post-retirement if you so wish"

How is this done ?

Ch 23 suggests that a QFM has to be involved. 

Are some of the banks & stockbrokers prepared to act ( for a fee I presume )
 as QFMs ? 

( I find it interesting that even though this looks to me like an accounting job accounting firms may not act as QFMs  )


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## LDFerguson (2 Aug 2007)

A lot depends on what your wishes are - if you want your ARF to invest in securities listed on the major exchanges and/or property in Ireland or UK, a self-directed ARF may be suitable for you. Standard Life are the front-runners in this field but not the only ones offering the service. You start a Standard Life ARF and then instruct Standard Life to buy what you wish. 

Alternatively, most brokers should be able to put you in touch with a QFM if the self-directed option doesn't suit you. In practice, QFMs can be


Banks
Building Societies
Credit Unions
Post Office Savings Bank
Life Assurance Companies
Cash handling intermediaries
Authorised members of the Irish Stock exchange or member firms of EU member states
IFSC life companies and fund managers
EU authorised banks, life assurers and fund managers
Other persons approved by the Minister
so there's plenty of choice.


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## olddog (5 Sep 2008)

Arf !  Arf !

A year has gone since I started this thread.

Now I wondering about QFMs

I gather they are considered responsible by Revenue to see that no one runs off with their ARF ( at least not without paying the Revenue first )

So what exactly is the QFMs official position ?

For  instance :

- If an ARF is composed of equities and cash are they held in the name of the QFM ?

- If not, how does the QFM keep track of the ARF income



Olddog


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## boaber (6 Sep 2008)

olddog said:


> For  instance :
> 
> - If an ARF is composed of equities and cash are they held in the name of the QFM ?
> 
> - If not, how does the QFM keep track of the ARF income



If the ARF is a post April 2000 ARF then the QFM is responsible for operating PAYE.  If the ARF is a self directed ARF then there will usually be an Investment Manager (IM) involved (usually a stockbroker e.g. Merrion, NCB, BCP).  If an ARF holder wants to take an income/drawdown from the ARF, then the IM will return funds to the QFM, who in turn will pay out the income to the policyholder (net of tax).


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