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Pensions

This part of the site contains information on life assurance companies and pensions.

Life Assurance companies are major providers of pension products which assist individuals in funding for an income in retirement over and above the State pension.

When you are planning for retirement:

Personal Pensions enable individuals to make provision for retirement.  There are two kinds  – Personal Retirement Savings Accounts and Retirement Annuity Contracts. Generally contributions are made by the individuals although employers may contribute.  Benefits may include a lump sum at retirement and an income in retirement for life.   Tax relief is available on contributions up to certain limits.

A Retirement Annuity Contract is a personal pension which is an insurance contract approved by the Revenue Commissioners.  It is a defined contribution plan  so the value at retirement depends on the level of contributions paid and the investment return.  RACs are generally taken out by the self-employed and employees who do not have access to an employer’s pension scheme.

Personal Retirement Savings Accounts (PRSA) are another type of personal pension.  Standard PRSAs must be taken out with an authorised PRSA provider (which includes many insurers) and must meet certain requirements laid down in legislation and in particular the charges must not exceed a certain level.  Anyone under the age of 75 may take out a PRSA.  PRSAs are also defined contribution plans.

Occupational Pension schemes are set up by an employer to provide employees with retirement benefits which can include an income for retirement and a tax free lump sum.  The benefits will be based on your service and salary (defined benefit) or on the fund accumulated before retirement (defined contribution) which will depend on the amount invested and the return on investments.   The employer and in most cases the employee contribute towards the cost of the scheme and tax relief is available on contributions subject to certain limits.

Additional Voluntary Contributions (AVCs) are extra savings you can decide to make to increase your retirement benefits under an occupational pension scheme.

Insurers also offer options for individuals who have reached retirement:

An annuity is a life assurance policy which converts a pension fund into an income in retirement which will continue until the policyholder dies.   

An Approved Retirement Fund (ARF) is a lump sum investment to which certain retirement benefits can be transferred at retirement.  The money is invested with a qualified fund manager and a range of investment options is available.  

An Approved Minimum Retirement Fund (AMRF) is similar to an ARF but cannot be withdrawn until age 75.  There are detailed Revenue qualifying rules around the availability of ARFs and AMRFs.

Here are some websites where you can obtain further information about pensions:

www.pensionsboard.ie

www.nca.ie

 

 

  

 

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