Post Retirement Structures

Post Retirement Structures – Annuity / Approved Retirement (Minimum) Funds

When you decide to take your retirement benefits you have a number of options open to you. The type of retirement plan to which you contributed will determine the retirement options available to you.

You will generally have the option to take part of your retirement fund as a tax free lump sum. If you contributed to a personal pension plan you can take up to 25% of your fund as a tax free lump sum. If you were a member of a group scheme, subject to certain restrictions, potentially you can take up to 1½ times your final salary as a tax free lump sum. Your remaining options will depend on your financial circumstances and legislative restrictions when you retire.

Advanced Financial Planning Limited T/A Donnellan & Co is regulated by the Central Bank of Ireland.


You may decide to use your retirement fund to buy an annuity. To do this you give a life assurance company a lump sum and in return it will pay you an agreed amount for the rest of your life. The income you receive is taxed under the PAYE system.

Approved Minimum Retirement Funds & Approved Retirement Funds

Certain categories of pension plan holders have alternative options. If your pension benefits arise from a Personal Pension, PRSA, AVC, or from a Group/Executive Scheme (where you were a greater than 5% Proprietary Director) then you have Approved Minimum Retirement Fund and Approved Retirement Fund options as alternatives to purchasing an annuity.

Approved Minimum Retirement Fund (AMRF)

Unless you have a guaranteed retirement income for life of at least €18,000 per annum you must invest €119,800 in an AMRF before investing any remaining funds in an Approved Retirement Fund (ARF). When you reach 75, your AMRF automatically becomes an ARF.

You may not withdraw any of the original capital invested in your AMRF until you are 75. However you may withdraw any investment growth at any time, subject only to the terms of your chosen investment. These withdrawals are taxed under the PAYE system.

Approved Retirement Fund (ARF)

If you satisfy AMRF requirements, the balance of your retirement fund may be invested in an ARF. An ARF allows you to manage and control your retirement fund after retirement and you can make withdrawals at any time (you can withdraw part or your entire fund), subject to the terms of the investment option you choose. These withdrawals are taxed under the PAYE system.

Investment growth in these vehicles is tax free. Funds held in either your AMRF or ARF is your money and you can bequeath the money as part of your estate. In the event of your death, your fund can be transferred to your spouse. If you intend to transfer it to persons other than your spouse, income tax and/or Capital Acquisitions Tax may apply. Your Donnellan & Co. financial advisor will be able to advise further in this regard.

You may use the full value of your ARF or AMRF at any time to buy an annuity.

Advanced Financial Planning Limited t/a Donnellan & Co is regulated by the Central Bank of Ireland.