It is now 1 year since pension freedom was introduced to Ireland, on 22 June 2016.

Michael Noonan as Minister for Finance, amended and improved the Defined Benefit pension rules which determined how ex-employees could access their pension funds from an earlier age than before.

The new rules enable ex-employees who have reached age 50 to transfer their Deferred Pension(s) to a Personal Retirement Bond and withdraw 25% of the bond as a tax-free lump sum – maximum that may be drawn tax-free is €200K.

The balance of the Fund then transfers to an Approved Retirement Fund (ARF). Previously Approved Retirement Funds (ARFs) were only available to Directors of Companies.

This significant change allows a change of ownership away from the Company and Trustees over to personal ownership, direction and control.

With increasing deficits in nearly all Defined Benefit Pension Schemes in Ireland and particularly low gilt yields, the team here at has seen a substantial increase in the numbers wishing to transfer out and also in the values of those transfers.

A transfer into an Approved Retirement Fund (ARF) creates an investment fund that allows the pension fund to keep working for its owner.

Advantages of an ARF

  • Tax-free growth – ARF holders can invest in funds that benefit from tax-free growth.
  • Inheritance planning – unlike a Defined Benefit Pension, an ARF can transfer to dependant’s next of kin on death.
  • Investment options – an ARF offers a wide range of investment opportunities which can be adjusted to match risk appetite.
  • Access – an ARF allows cash lump sums to be withdrawn from the fund whenever required. was one of the first to recognise this Ministerial change and described it as “The Biggest Change in Irish Pension Legislation since the 1990’s”.  Over the last twelve months, we have seen month-on-month increases in numbers of deferred members of Defined Benefit pension schemes take up the opportunity to cash out of their schemes and reinvest in investment opportunities adjusted to their risk appetite.

View more stories of people who have made the shift, and enjoyed up to 25% of their pension fund tax-free (names have been changed for client confidentiality):

If you are a deferred member of an Irish Defined Benefit scheme, it would make a lot of sense to get in touch and find out more about the options available to you, especially since last year’s change in the legislation.

It’s hard to get excited about pensions!

But the change in the legislation last year has made this the most exciting and opportunistic time to be a Defined Benefit pension holder right now.  Get in touch with us and we’ll do our best to get you as enthused as we are.