ARF...big deal???

S

Squonk

Registered User
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My previous employment has closed down and the pension fund has wound up. I have an option to transfer my fund to a buy-out-bond, or to a PRSA (through my new job). It seems one of the benefits of the PRSA is that it gives me access to an ARF when I retire. With the BOB I am stuck with annuities. Right now my decision hinges on the perceived benefits (or otherwise) in having access to an ARF.

This is a bit of an open-ended question but is access to an ARF really worth chasing after as compared to an annuity? Are the benefits the ARF offers in terms of flexibility etc so good that I would be mad to even consider an annuity (and hence a BOB)? Thanks for any help you can give.
 
There's a lot that you might need to consider depending on your age, personal circumstances, the sixe of the fund and even your exposure to potential personal insolvency but in gerneral having the option of an ARF is a good thing. If it is important to you then get advice from an qualified adviser.
 

Assuming that your retirement is years away, sit on your hands until the Finance Bill is published. Budget 2011 proposed that ARF options will be available to all members of Defined Contribution pension schemes and that should carry through to Buy-Out Bonds.

Assuming this happens, the Buy-Out Bond may be the better option as they tend to have lower charges and you can choose to draw your benefits from age 50 from a Buy-Out Bond, regardless of whether or not you're actually retiring at that time.
 
Thanks Liam...I've been digging around and what you say is true. The BOB has 0.35% less charge than the PRSA, and they will give a 3.5% "top-up" of my fund. The BOB it is.......
 
Squonk said:
Thanks Liam...I've been digging around and what you say is true. The BOB has 0.35% less charge than the PRSA, and they will give a 3.5% "top-up" of my fund. The BOB it is.......
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Do you have the facility to wait until the Finance Bill is actually published? There might be some amendments in it that could affect your decision.
 
LDFerguson said:
Do you have the facility to wait until the Finance Bill is actually published? There might be some amendments in it that could affect your decision.
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I'm afraid not. Decision has to be made by tomorrow. Thanks.
 
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