I am approaching retirement, what do I need to do?
The first thing to do is contact a New Ireland Financial Advisor or your Broker.
If you have a policy with us, you can call our Retirement Claims Teams directly on the following numbers. We will prepare your retirement options pack, which will include a claim form. We will send the pack to you and your Financial Advisor so you can discuss which option is best for you.
For Corporate Pensions, Executive Pensions & PRSAs call (01) 617 2680
For Personal Pensions, AVC Pensions & Retirement Bonds call (01) 617 2796
What is an Annuity?
An annuity is a contract with a life assurance company that will pay you a regular pension income for the rest of your life in return for you paying them a lump sum when you retire. The amount of pension income (annuity) you receive will depend on many factors such as the size of the lump sum, annuity rates at the time, your age, whether it is payable for a set period and/or includes a dependant’s pension and state of health.
What happens if I retire early due to ill health?
If you have to retire early due to ill heath you may be able to take your pension benefits as soon as that happens. If you are a member of an Occupational Pension Scheme the Trustees of your Scheme will have to sign off on your ill health. If you are a member of a Personal Pension or PRSA your ill health claim will need to be admitted by one of our underwriters.
When can I claim my Pension?
If you have a Personal Pension or an Individual PRSA you can take your benefits from age 60. You do not have to retire to take your pension benefits. Some occupations such as fishermen, firefighters and jockeys can retire earlier.
If you are a member of an Occupational Pension Scheme then, subject to the rules of the scheme, you may be able to take your benefits at any time after your 50th birthday. If you do so between age 50 and 60, you must retire from your job. From age 60 you can continue to work and take your benefits at the same time. There are specific rules relating to proprietary directors.
What is an ARF?
An Approved Retirement Fund is a personal investment fund where you can keep part or all of your pension invested as a lump sum after retirement. You can withdraw from it regularly to give yourself an income. It also enables you to pass on the remaining value of your fund to your dependants when you die. There are eligibility criteria and not everyone can access the ARF option. Please refer to your Financial Advisor if you have any queries.
Is there a maximum pension fund I can have?
Depending on the type of pension arrangement you have, there will be limits as to how much you can contribute to your pension plan. However, in all cases there is an overall standard pension fund threshold of currently (2015) €2 million. We recommend that you seek professional financial advice if you wish to maximise the value of your pension fund before retirement.
What happens to my Pension on my death?
Normally your pension will cease on your death unless you have purchased a pension which is payable for a minimum period even in the event of death.
Will my Pension be taxed?
Pension payments are subject to income tax at your marginal rate and USC deductions under the PAYE system. PRSI (up to age 66) may also apply. New Ireland will make these deductions at source based on your rate of income tax and will remit them to the Revenue Commissioners on your behalf.
Can I re-invest my retirement lump sum?
If you take part of your pension as a free lump sum, you are free to do what you want with your lump sum. One of the options available to you is to re-invest part or all of your money for your future. New Ireland has a range of investment fund options designed to meet the needs of different investors – from very low to very high risk funds.
What happens to my ARF when I die?
When you die, the remaining value of your ARF is available and can be left in your will as part of your estate. The proceeds can also be transferred into an ARF in your spouse’s/civil partner’s name.
Do I have to purchase my pension from the life assurance company with whom I have my pension fund with?
Not necessarily, you may be able to purchase your pension (also known as an annuity) from any provider. You should check if there is an “open market” option available to you and if so speak to your Independent Broker or New Ireland Financial Advisor for further information.
New Ireland has one of the most competitive rates in this area, so talk to us today about tailoring a pension to suit your needs in retirement.
ARFs/Deemed Distribution FAQs
Why do you not leave the balance after tax invested in my ARF?
If you leave the balance invested in your ARF you may be taxed on it again if you withdraw it at a later date.
Are payments subject to tax?
Yes. New Ireland will deduct tax at higher rate of income tax if we do not hold a current Certificate of Tax Credits for you. We also deduct USC (and PRSI where payable).
How do I apply for a Certificate of Tax Credits?
Please contact your local Inspector of Taxes and request a Certificate of Tax Credits and Standard Rate Cut-Off Point made out to New Ireland Assurance Company plc under our tax registered number which is 9664208J.
What are the risks of an ARF?
When you purchase an annuity pension, you have the comfort of a secure income for the remainder of your life. When you buy an ARF, there is no guaranteed income and the length of time that your fund will be available depends on the withdrawals you make and the investment growth achieved by your fund.
For example, if a high level of withdrawals were made relative to the growth achieved, there is a risk that your fund could run out before death – and the longer you live, the greater the chances of this happening. You should also note that, in order to achieve good returns, it is likely that an ARF will invest at least partly in assets such as equities and properties. The value of these assets may fall as well as rise, particularly in the short term.
What is an Approved Minimum Retirement Fund?
Similar to an ARF an AMRF is an investment fund which is personally owned by you. It has the following features:
- Any investment growth achieved can be accessed at any time and this is subject to taxation.
- An AMRF becomes an ARF on the individual reaching age 75 or earlier death.
- An AMRF also becomes an ARF on the individual satisfying the minimum guaranteed income requirement.