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ARF Frequently Asked Questions

What is An ARF?

An ARF is a personal tax-efficient investment fund into which you can transfer all or part of the balance of your pension fund after you receive your retirement lump sum.

Who can take out an ARF?

ARF is available to members of an Occupational Scheme (assuming scheme rules allow) and individuals that hold a Personal Pension, Personal Retirement Savings Account (PRSA) or Retirement Bond and have reached Normal Retirement Age or have taken Early Retirement.

Before you can invest in an ARF, you must satisfy the income test. The test is that you must have a guaranteed pension annual income equal to €12,700 as at January 2016. This includes a pension or annuity that is guaranteed to be payable for the rest of your life, including any State guaranteed pension. If you do not satisfy the income test you can still purchase an ARF on condition that you also purchase an Approved Minimum Retirement Fund (AMRF).

The test does not apply to individuals aged 75 or over, who may invest in an ARF without satisfying the guaranteed income or AMRF requirements.

What is an AMRF?

An AMRF is similar to an ARF except that the capital invested in the AMRF is not subject to an imputed distribution (please see ‘Imputed Distributions’ below) until the individual is aged 75 years. 

The amount which must be invested in the AMRF is €63,500 (as at January 2016) of your remaining fund (or the entire fund if it is less).

You should note that when you reach the age of 75, or upon death, the AMRF automatically converts into an ARF. 

The AMRF holder can access up to 4% of the value of the assets each year, irrespective of age as a once-off withdrawal, subject to PAYE. Any distribution taken form the AMRF can be used to reduce the minimum distribution amount from the ARF assets in that year.

Can I contribute to my ARF?

No. An ARF is a post retirement product which is designed to provide an income for you in retirement. It can only accept transfers from existing pension arrangements. 

Can I transfer in other pension benefits?

  • The only assets which can be transferred into your ARF/AMRF are:
  • The value of retirement benefits not taken as a lump sum at retirement, arising from a defined contribution occupational pension scheme or defined benefit scheme (subject to certain restrictions)
  • The value of Additional Voluntary Contributions ('AVCs') at retirement not taken as a lump sum.
  • The value of a Retirement Annuity Contract ('RAC') or Personal Retirement Savings Account ('PRSA') or Retirement Bond not taken as a lump sum.
  • The value of assets transferred from another ARF/ARMF held by you (or your deceased spouse)
  • The value of assets transferred to you under the terms of a court order.

Can I transfer my ARF out of Davy?

The value of your ARF is available to transfer to another ARF provider. There are no charges for transferring your benefits to another ARF provider.

How is my ARF Structured?

Under an ARF, you will enter into a contract with a Qualifying Fund Manager ('QFM'). The role of the QFM is to ensure your ARF is managed in line with prevailing Revenue guidelines and legislation and to account for any tax that may be due on distributions from ARFs. J&E Davy (“Davy”) has been approved by the Irish Revenue Commissioners as an approved QFM and your ARF is held in your name by Davy as the QFM.

You should be aware that you will remain the beneficial owner of all assets in your ARF.

When can benefits be taken?

You can withdraw funds from your ARF when you require. You may make regular withdrawals or single ad hoc withdrawals from your ARF.

Legislation has introduced an annual taxable ‘imputed distribution’ which will be applied to the value of assets in ARFs. This means that PAYE will be payable on an amount which is assumed to be taken out of your ARF by you. The imputed distribution amount as at January 2016 is:

- 4% for individuals with combined ARF and vested PRSA assets less than €2 million and who are between 60 and 69 for the full tax year

- 5% for individuals with combined ARF and vested PRSA assets less than €2 million and who are 70 or over for the full tax year

- 6% for individuals with combined ARF and vested PRSA assets more than €2 million and who are 60 or over for the full tax year

Note: the higher rate of 6% will apply to the entire aggregate value of the assets held in an ARF(s) and/or Vested PRSA(s) (not just that portion in excess of €2.0 million).

This imputed distribution is applicable to ARF holders who are 60 or over for the full tax year. Actual distributions made during the year from the ARF may be deducted from the imputed distribution to arrive at the net imputed amount, if any, to be regarded as a distribution. 

What benefits are payable on death?

In the event of your death, your ARF/AMRF becomes an asset of your Estate and will therefore be subject to the terms of your will or should you die without leaving a valid will, it will be dealt with in accordance with the intestacy provisions of the Succession Act 1965. A transfer of ARF/AMRF assets after your death is taxed as follows (as at June 2016):

ARF/AMRF inherited by Income tax due Capital Acquisitions Tax ('CAT') due
Surviving spouse None where transferred into an ARF of the surviving spouse.
Yes, if not transferred to ARF of survivor's spouse. This will be treated as a taxable distribution by the deceased in his/her year of death.
Child aged 21+ at date of your death Yes. Income tax at a rate of 30% None.
Child aged less than 21 at date of your death. None.  Yes. Normal inheritance tax rules will apply.
Stranger in blood (anyone else not being your surviving spouse or children) Yes. This will be treated as a taxable distribution by the deceased in his/her year of death.  Yes. Normal inheritance tax rules will apply.


What are the charges?

  • There are no set up charges
  • There are no transfer charges

There will be 

  • For Execution-Only accounts, an annual dealing charge for any number of transactions, subject to overseas charges for non-Irish/non-UK listed instruments.

In all cases, other charges apply. 

Please click here for more information on fees and charges.

What are the risks?

For more information on the risks of investing in an ARF, please read the Pension Risks page.

Warning: The information contained herein is based on our understanding of current tax legislation in Ireland and the current Irish Revenue interpretation thereof and is subject to change without notice. It is intended as a guide only and not as a substitute for professional advice. You should consult your tax adviser for the rules that apply in your individual circumstances.

Warning: The income you get from this investment may go down as well as up.