The Minister for Finance has announced that individuals in Defined Benefit (DB) pension schemes can now ARF their benefits. This will provide a welcome relief for members in underfunded schemes. It is a condition, however, that the benefit is first transferred to a Buy-Out Bond (BOB), sometimes known as a Personal Retirement Bond (PRB).
Up until this announcement, the ARF option was only available in respect of pensions payable from Defined Contribution (DC) pension schemes and personal pension plan arrangements, including PRSAs. The only draw-down option open to an individual with a Buy-Out Bond funded from a Defined Benefit scheme was to purchase a pension annuity with the funds in the Buy-Out Bond.
With the ARF option open to pensioners, there is now potential to remain invested in retirement and, perhaps, to make up for lost ground by purchasing, for example, revenue-generating assets such as property.
With this important policy change, which took effect on 22nd June, access to the ARF option will be available in respect of all Buy-out Bonds regardless of whether the transfer to the Bond came from a Defined Contribution or a Defined Benefit arrangement and regardless of when the transfer to the Buy-out Bond took place.
If you have any questions on this blog or in relation to the ITC Buy-Out Bond, please contact us on 01 661 1022
*Please note this content is the view of the author and not of Independent Trustee Company