# annual pension from 100k in an ARF



## cerberos (20 Aug 2008)

Looking at Quinn Life they give examples of drawdown for an 100k ARF (illustration only at 3% and 6% growth) 

However they show the punter getting 1500 per annum pension from the 100k and they get 1021 per annum expenses.

Is this the normal expected amount for a person to draw down as a pension from 100k (ie) 1500 taxable?

Does this mean that joint annuity would be a better bet?

Thx C


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## LDFerguson (20 Aug 2008)

Without seeing the illustration, it's hard to comment but it appears you're looking at the 3% illustration.  I would have throught that if Quinn Life charge 1% per annum and project at 3%, the net income for you would be €2,000,  

Bear in mind that if you're only looking at the 3% illustration, if the fund actually grows at >3%, your €100,000 will be growing despite your withdrawals.  This will never happen with an annuity.  

If you're only withdrawing the growth from an ARF, the original €100,000 remains intact.  Once you purchase an annuity, the €100,000 is gone.


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## cerberos (21 Aug 2008)

agree you get to keep your money but you need 1M to produce 20K per annum. can 1 get access to an ARF provide with less than 1% charges.


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## LDFerguson (21 Aug 2008)

cerberos said:


> agree you get to keep your money but you need 1M to produce 20K per annum.


 
Only if you want to leave the 1M for your heirs and are only getting a 3% gross return.  

To use a different example, you could put the 1M into an ARF achieving a return of 4% per annum before charges, 3% after charges, which wouldn't be a high risk fund.  You could withdraw €55,000 per annum and the fund still wouldn't be fully exhausted after 25 years.   



cerberos said:


> can 1 get access to an ARF provide with less than 1% charges.


 
Off the top of my head, Irish Life & Standard Life have ARF products with annual management charges starting at 0.75%.  With these variants, you'd usually be charged a once-off entry fee but it wouldn't take too many years to recoup that from the reduced annual management fee, all other things being equal.


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## cerberos (22 Aug 2008)

thx Liam


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## cerberos (13 Jun 2009)

Is there any more information on lower ARF charges?

Also, is there any way to access Vanguard or ETFs for an ARF that will have lower annual charges than .75 % or 1%


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## cerberos (13 Jun 2009)

I was looking at ILife ARF charges - 1.5% to 2.125%

Cannot see .75% !!


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## LDFerguson (16 Jun 2009)

Look for the product known as Irish Life ARF 2.


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## Marc (16 Jun 2009)

Cerberos,

It is indeed possible to gain access to lower cost investment funds within an ARF. However, ideally you should ensure that your Qualifying Fund Manager (QFM) is a Trust rather than an Insurance Company. This will offer you considerably more investment choice than that available from an Insurance company packaged product.

We offer our clients a brokerage account within the ARF for ETFs with fixed trading costs of typically €25 per trade. We also offer a range of index funds similar to Vanguard with costs from 0.3%pa for a global equity fund which holds over 7000 stocks.

For reference, an ARF would cost about €2000 to set up and the annual trustee fee should be around 0.25%pa. 

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## cerberos (16 Jun 2009)

Thx Marc & Liam.

Who is Goldcore?

Where do I get a Qualifying Fund Manager (QFM) list?

Also, given the state of the financial industry - how do you protect your ARF?

C


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## LDFerguson (16 Jun 2009)

cerberos said:


> Also, given the state of the financial industry - how do you protect your ARF?


 
If you're looking for Government protection, you could consider Standard Life. As Standard Life Ireland is a branch of the UK parent company all policies taken out since 1st December 2001 are covered by the UK Financial Services Compensation Scheme in the event of a Standard Life default. This covers 100% of the value of the policy up to £2,000, plus 90% of the balance, without limit. There is no equivalent Irish protection scheme.


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## Marc (17 Jun 2009)

How do you protect your ARF?

A trust is usually created as a result of a person transferring land or money in a trust document (called a trust deed or instrument) in order to benefit another persons or persons, called the beneficiaries of the trust. The trust specifies that the land or money is held on trust for the beneficiary by a trustee or trustees. Trustees must carry out their functions to a very high legal standard of good faith (they act in a fiduciary capacity).

The general law of trusts is currently governed by a combination of case law developed by the courts over the years and statutory regulation under the Trustee Act 1893. 

So, if you use a trustee, you are protected by legislation and you would have recourse to the courts if a Trustee was found to be in "breach of trust".

There are two functions typically performed by a QFM
1)Custodian and administration
2)Investment management

My advice would be to separate these functions since the traditional route (Insurance Company or Stockbroker) means that you will typically be sold the providers proprietary funds rather than a range of passive ETFs or Index Funds.

Firstly. You would need a competent trustee company - like Independent Trustee Company Ltd [broken link removed]

Secondly, you need an investment adviser with the experience to advise you on a portfolio of ETFs and Index Funds. I have been providing advice on portfolios of ETFs and Index funds since about 2000.

Remember if you buy highly regulated products (unit trusts OEICS, SICAVS, UCITS) you are already heavily protected but you further protect the value of your ARF through the asset allocation decisions you make i.e the allocation of your fund to property, equities, bonds and cash.


Who are GoldCore?

We are a firm of Asset Diversification specialists established in Ireland in 2003 with clients in 30 countries.

We specialise in providing retirement planning advice to clients considering or with an existing ARF.

We provide asset allocation advice, brokerage services and a range of index funds unique in Ireland.

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## cerberos (17 Jun 2009)

thx Marc


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