If you were a member of a Defined Benefit (DB) pension plan that was shut down, you were most likely given a payoff that was invested in a Pension Retirement Bond, also known as a Buy Out Bond (BOB).

Until last week, the options available upon retirement for holders of BOBs originating from DB schemes were restricted to buying an annuity. Annuity rates (and hence income to retirees) have fallen significantly in recent years as long term interest rates collapsed and life expectancy increased. On 22/6/16 theThe Department of Finance changed this rule. click here for press release

While annuities suit some retirees, they are not for everyone and it’s good to have flexibility to choose alternative arrangements. The rule change now means that upon retirement people in this situation can chose the so-called ‘Approved Retirement Fund’ (ARF) option.

The ARF option means you maintain control of your pension investments in retirement. You chose how and where the funds are invested, and choose how and when to make drawdowns (with certain restrictions and subject to income tax). Your pension assets can continue to grow free of capital gains tax in retirement, and unlike annuities the value of an ARF can be left to your estate upon death.

There are pros/cons to consider when comparing Annuities vs ARFs. We can help to cut through the confusing terminology and help you make an informed decision.

Talk to us if you would like us to assess your existing pension savings, of if you would like a more detailed explanation of the above.


Ardbrack Financial Ltd | 021-4774791 | info@ardbrack.com | www.ardbrack.com