Retirement Planning

Personal Retirement Savings Account

A PRSA (Personal Retirement Savings Account) is a flexible, cost-effective pension plan. We offer a non-standard PRSA that allows you to take control of both the investments and costs associated with your retirement. The PRSA can invest in a wide range of asset classes in a tax-efficient manner, regardless of your future or current employment status. This gives you flexibility on how you receive benefits at retirement.

Who can have an PRSA?

Anybody can have an PRSA.

What are the benefits of the PRSA?

  • You have complete control over your investment strategy.
  • You can select from a wide variety of investment options and providers
  • A PRSA is flexible and can change to suit your circumstances, your employment, income and risk appetite.
  • A PRSA can accept transfers from existing pension funds at no charge. You have the potential to hold all your pension arrangements in one source.
  • The costs of your PRSA are fully transparent.
  • A PRSA offers good creditor protection of your retirement savings.
  • You can enjoy tax relief at your highest rate of tax on any personal contributions made (subject to Revenue limits).
  • You or your employer may contribute to your PRSA. Your employer’s contribution is no longer treated as a Benefit in Kind following the 2022 Finance Act.
  • Your PRSA assets grow free of both capital gains tax and income tax.
  • You can plan how your eventual retirement benefits are taken, in order to suit your needs. For example, you may take a portion of your benefits as a lump sum and/or set up an Approved Retirement Fund to keep your investments in low-cost environment.
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Buy Out Bond

If you are member of an occupational pension scheme, leaving or have left employment, or your pension scheme is being wound up, it is time to consider your options for the pension fund that has been built up. The Buy Out Bond is a superior option if you want to transfer your pension fund to a personally owned pension scheme to access at retirement.

What is the Buy Out Bond?

The Buy Out Bond is an individual pension bond established in your name. You can transfer your pension benefits into the Buy Out Bond if you leave a company pension scheme or if your company pension scheme is shut down. It is established by the pension trustees of your existing pension scheme. Its aim is to put you in control of your pension benefits. The value of your pension benefits at the date you leave your current pension scheme will be transferred into the Buy Out Bond.

Who can set up a Buy Out Bond?

Any employee or former employee can opt for a Buy Out Bond in circumstances where:

  • You are leaving or have left employment.
  • You are leaving a pension scheme.
  • Your company pension scheme is being wound up.

What are the benefits of the Buy Out Bond?

The Buy Out Bond enables you to take control of your existing pension benefits and invest them in order to make them work for you. It is not unusual for people to change employment many times during their career and a Buy Out Bond provides an opportunity for you to manage your previous pension benefits and invest them in a way that suits your needs. The Buy Out Bond is designed to offer flexibility, transparency, security and control.

Approved Retirement Fund

An ARF is a post-retirement investment vehicle. Subject to Revenue’s minimum distribution rules, the ARF leaves it up to you to decide whether, or how much, you wish to draw from your retirement fund. It gives you complete freedom as to where you wish your retirement funds to be invested. It usually allows for the investments in your pension scheme to be brought into retirement with you.

The ARF lets you place some, or all, of your pension fund value, depending on your preference, in a wide range of investments. These could be a deposit account, a share portfolio with a stockbroking house, a tenanted property, an investment in a managed fund with a life company, a tracker bond or a combination of any or all of these. You are then free to draw a regular income from the fund if you so choose.

Who can set up an ARF?

The following pension investors may avail of the ARF option at retirement:

  • Personal Pension Plan investors (investors who have a pension policy with a life company);
  • Personal Retirement Savings Account (PRSA) investors;
  • Members of Small Self-Administered Schemes;
  • Members of employer-sponsored pension schemes who have made Additional Voluntary Contributions (AVC)
  • Your company pension scheme is being wound up.
  • Members of employer-sponsored Defined Contribution pension schemes, subject to the terms of the scheme; and
  • Holders of Buy Out Bonds.
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Approved Retirement Fund

Many ARF investments currently on offer are either asset or fund specific, meaning that you must invest your ARF funds in specific asset classes, such as commercial property. Alternatively, the ARF offerings from certain life companies may restrict you to investing in one or more of a number of funds. More often than not, you will find that you become tied to a life company ARF provider for a number of years and that generous initial allocation rates are matched by severe penalties if you decide to change provider.

The ARF is different. It offers you the flexibility to invest your post-retirement funds in the assets of your choice – with no restriction on asset classes, products or investment funds. (Of course, this is subject to the relevant legislation and Revenue rules.)

You can determine the assets in which your ARF is invested. There are no allocation rates and no penalties if you decide to change provider. The ARF is managed in an entirely transparent manner.

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