# What is lowest cost ARF



## cronley (20 Mar 2011)

1. I have a large pension pot that I am considering putting into an ARF. I want to keep the annual management fee payable to the ARF provider as low as possible. Can I negotiate an annual fee of no more than €1,000 pa, instead of a % of the fund. Which provider has lowest fees.

2. How does it work- if I got the ARF from, say, Standard Life & invested the pot in an ordinary deposit A/C with, say, Bank of Ireland  - what annual mgt fees arise with Standard Life & BOI - is there mgt fees with both. Is DIRT payable on BOI deposit. Who deducts income tax on my pension drawings from BOI deposit - is it Standard Life or BOI.
If I got ARF from Irish Life & invested pot in Irish Life unit funds - is there annual mgt fee to Irish Life for the ARF, & a second lot of fees on the Irish Life funds. 

Help appreciated.


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## eirefinq (20 Mar 2011)

1. i dont think this is possible, you will be charged a % of the investment. Go to a broker and see if he can get you the best deal. 
2. As its a pension arrangement there would be no DIRT. I would imagine Standard would deduct any income tax due from the ARF.
3. Re Irish Life ARF there would be a mgt fee alright, in terms of extra fees - this would depend on the fund I think. I'm pretty sure that Irish Life have a Self Invested Pension Fund which facilitates deposits with a range of banks, share trading etc.


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## North Star (20 Mar 2011)

Generally speaking you have a choice of 2 types of ARFs; 1) the Insured option through a life/insurance company which administers the ARF and provides a range of investment option including deposits and also managed funds etc and 2) a self administered ARF where a qualifying fund manager (QFM) administers the ARF and you have to manage the investment process. There are pros and cons for each option and the decision can come down to costs, investment performance track record and how much responsibility you want to take for managing the investments.

If you go with the insured option you will be charged an annual management fee or AMC ( % of fund ) if you choose to place funds on deposit you are only charged the AMC once. eg in your example Standard life AMC is 1% and if you earn 2.5% on deposit you will earn 1.5% net after the AMC. You will have to draw down at least 5% of your ARF per annum ( revenue rule) and this is treated as income and taxed at your marginal rate ( depends what total income you are earning) 

The tax treatment is the same for the self administered ARF but the QFM will charge a set up fee and an ongoing administration charge so you need to compare total costs which may vary depending on the amount you invest in the ARF/AMRF

The self administered option may well have lowers ongoing costs but the insured option may provide you with a net allocation above 100% which offsets the higher ongoing costs. 
This is just a brief comment; you could well be advised to do a thorough review or get a fee based firm to provide you with this review.  You can then make a well informed decision as to which option suits your requirements best.


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## Marc (21 Mar 2011)

It depends how big the pension fund is. 

Some QFMs will cap their fees but you need a few million in the pot.


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## wallym (7 Oct 2014)

*Becoming my own QFM*

Hi There, I'm new to the forum so as way of introduction I'm in my 50's, studying for the QFA with a view to specializing in pensions. Is there an option to become a QFM after that and therefore manage my own pension, while generating an income as QFM for others - probably not as simple as that but just interested to see if there are any options to reduce ARF overheads.

Cheers, Wally...


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## Steven Barrett (8 Oct 2014)

There is a charge to run the fund and a management charge to run the policy. Insurance companies don't disclose the cost of running the fund, just the policy (AMC). 

If you go self directed, you will be told the cost of running the fund itself. 


Steven
www.bluewaterfp.ie


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