The Finance Act 2021, which was signed into law on 21 December 2021 included some important updates for our customers, in particular our AMRF and Vested PRSA customers

As these changes have a far reaching impact, we wanted to share the key points of the Act and the action that New Ireland is taking as a result of these changes.

Removal of the specified income requirement/AMRF

With effect from 21 December, the requirement to have the specified pension income of €12,700 p.a or have €63,500 invested in an AMRF in order to invest in an ARF/take taxable cash has been removed.

This means that the AMRF product is no longer required and the option to take a 25% retirement lump sum and purchase an ARF or take taxable cash is now available.

 

• Closure of the AMRF product

As the AMRF product is no longer required, any AMRF applications in pipeline or received after the date of enactment will be set up as ARFs. We will contact Brokers of these policies to notify them of this change.  If both an AMRF and ARF application is received we will set up one ARF policy.

 

• Conversion of existing AMRF policies

From 1st January all AMRFs are required to convert to ARFs. No new policy is required. The AMRF will be automatically converted to an ARF on our system within the existing policy.

 

• AMRF customers with existing ARF polices with us

Where a customer also has an existing ARF policy with us and has a regular income set up, the new ARF policy will replicate the frequency of the existing ARF income and the payment will be set up for the minimum amount liable under imputed distribution where applicable.

 

•  Vested PRSAs

The requirement to set aside €63,500 of a vested PRSA policy has been removed following the passing of the Finance Act.  Vested PRSA customers now have access to the full value of their vested PRSA policy, and will be subject to imputed distribution requirements where applicable.

 

• Customer Communications

A letter will issue to all AMRF and Vested PRSA customers before the end of Q1 2022 outlining the changes that have come in to effect. We will advise customers of how we will apply any imputed distribution where applicable and request bank account details if we don’t already have them on file. We would appreciate you engaging with your customers on this to ensure they send us their bank account details if required.

Our updated retirement claim forms and ARF application form are now available on our Literature Library

 

Additional important changes

• Changes to the rules for transfers from Occupational Pension Schemes (OPS) to Personal Retirement Savings Accounts (PRSA)

With effect from 21 December the requirement to have less than 15 years scheme service on transferring from an OPS to a PRSA has been removed.

 

• Death In Service – Changes to options for dependants

With effect from 21 December the requirement under an OPS to purchase a dependant’s annuity following the payment of the Revenue maximum lump sum on death in service now extends to allow dependants to purchase an ARF as an alternative.

 

In our most recent Life & Pensions Technical Update we summarised the pension related changes put forward in the Finance Bill and the potential impact they may have on pension clients.

 

You can also find out more by viewing our recent The Finance Bill and IORP II – Impacts & Considerations webinar on demand.