Approved Retirement Funds (ARFs) allow people to keep part or all of their retirement fund invested post retirement age. Income can be drawn from an ARF as and when the holder wishes, subject to an imputed minimum withdrawal of 5% of the value of the fund per annum. Currently, an individual can invest in an ARF where they can show a guaranteed yearly income of €18,000 (or by making a €119,800 investment in an Approved Minimum Retirement Fund (AMRF)).
The Finance Bill 2013 proposes broadening the access to ARFs by reducing the minimum access requirements to pre-2011 levels. Prior to February 2011, the specified income threshold requirement stood at €12,700 and the Approved Minimum Retirement Fund (AMRF) / annuity purchase threshold was €63,500. These revised pre-2011 limits will apply for three years from the passing of the Finance Act 2013. The higher limits are due to be reinstated by the Finance Act 2016.
It is important to also note that the measure is retrospective and AMRFs with funds greater than €63,500 since 6 February 2011 will have the applicable balance over that level re-denominated as an ARF. More funds will therefore convert to ARF status and become subject to the annual imputed drawdown and consequent tax liability.