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Statement by a Department of Finance Spokesperson on Approved Retirement Funds

A Department of Finance spokesperson made the following points on Approved Retirement Funds:

  • Approved Retirement Funds are not covered by the levy as they are not pension funds.
  • They are closest in nature (and are an alternative) to an annuity.
  • An Approved Retirement Fund is not tax free.
  • Drawdowns are taxed at the marginal tax rate.
  • If not drawn down there is a notional distribution of 5% of the total assets per annum which is then charged at the owner’s marginal tax rate.
  • Indeed budget 2011 increased the annual notional distribution from 3% to 5%.
  • This is a permanent not a temporary change, whereas the Levy is temporary.