To ARF or not to ARF

R

Rasputin

Registered User
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Hi all,
I have approx 200k in a pension fund from a previous employer, which I can retire from aged 50 (later this year). I am considering this as I could use the tax free lumpsum to get a few bits done to the house without getting a loan etc. If I do this, I will need to transfer the rest into an ARF/ARMF, which I didn't think would be a problem. However, the more I look into it the more difficult it is to compare products, establish actual costs and work out if I would in fact be crazy to do this now.
P.S I have a pension with my current employer that I am contributing to and will do so up to 65, which will be just about sufficient for my needs.

Does anybody have any opinions on this course of action, or more importantly, have any idea what are the best value products out there in this sphere. I want to avoid as much costs as possible that will erode the pot.
Thanks
 
Is the decision really all that different to working out what pre-retirement vehicle to hold the €200k if you don’t ‘ARF’ it?
 
Gordon Gekko said:
Is the decision really all that different to working out what pre-retirement vehicle to hold the €200k if you don’t ‘ARF’ it?
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My understanding is that if I access the lump sum at age 50, I will need to put it in an ARF / AMRF. What other pre-retirement vehicles can I put it into ?
 
Rasputin said:
My understanding is that if I access the lump sum at age 50, I will need to put it in an ARF / AMRF. What other pre-retirement vehicles can I put it into ?
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Buy Out Bond, PRSA, new scheme.

It sounds to me like there’s merit in you ARFing it if it means avoiding expensive borrowing.
 
So I can just transfer the balance to my existing scheme ? Didn't realise that- might be the way to go to avoid ongoing ARF costs.
 
Rasputin said:
So I can just transfer the balance to my existing scheme ? Didn't realise that- might be the way to go to avoid ongoing ARF costs.
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No.
If you “retire” this deferred pension and take 25% as a lump sum, then you must either ARF/AMRF the balance or buy an Annuity. You CANNOT transfer the balance to your existing scheme or to a PRSA or BOB.
If you do go the ARF/AMRF route you will not be required to draw down any income from the ARF until age 61.
 
Rasputin said:
So I can just transfer the balance to my existing scheme ? Didn't realise that- might be the way to go to avoid ongoing ARF costs.
Click to expand...

No, you asked about pre-retirement structures.

If you need the lump-sum, just ARF it.

Do some research re providers and people will give you a steer here.
 
Thanks both, I think I will access the cash and purchase an ARF.
I have tried to do some research, but its very hard to compare products on a like by like basis. There is just so much waffle, and the pension authority website is next to useless. The only place I could see where I might be able to get some sort of comparison is onequote.ie . Of the other ones, the Davy Select product seems to be better value than what all the insurance companies provided.

Would anyone recommend a product that would be worth looking into further, or would like to share the fruits of their research
 
There is no central comparison site for ARFs and the pensions authority have no jurisdiction over ARFs, so there won't be any information there.

Life companies have a multiple of different contract structures (up to 10 for some companies), so you won't get an independent comparison service.

You want to keep your management fees at a low level.

Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
Avoid going to the banks as all banks can only sell you the ARF products of one provider and can't offer you any choice. Similarly tied agents or going directly to the pension companies. You don't get a better deal by going directly to the pension companies. A good broker can show you the difference between all the products. Make sure you ask how much the broker is going to be paid early on, so that you know that the broker is not going to try to steer you into a product that pays him more. For the amount you're looking at, you should get 100% investment and an annual charge of no more than 0.75%, perhaps less.

Fund choice is personal to you. No single fund or company is better than others for all people. The job of a broker is to explain the differences between the funds and establish which one is right for you. Ask around trusted friends, family members, colleagues to get a personal recommendation of a good broker. Like any profession, there's good and bad brokers out there. Alternatively, there's a few good ones that post on here.
 
Dave Vanian said:
Avoid going to the banks as all banks can only sell you the ARF products of one provider and can't offer you any choice. Similarly tied agents or going directly to the pension companies. You don't get a better deal by going directly to the pension companies. A good broker can show you the difference between all the products. Make sure you ask how much the broker is going to be paid early on, so that you know that the broker is not going to try to steer you into a product that pays him more. For the amount you're looking at, you should get 100% investment and an annual charge of no more than 0.75%, perhaps less.

Fund choice is personal to you. No single fund or company is better than others for all people. The job of a broker is to explain the differences between the funds and establish which one is right for you. Ask around trusted friends, family members, colleagues to get a personal recommendation of a good broker. Like any profession, there's good and bad brokers out there. Alternatively, there's a few good ones that post on here.
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Many thanks Dave, good to have a benchmark of what to expect
 
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