Pension Annuities

Annuities Explained

An annuity is using your accumulated pension fund/s to purchase a future income. You can purchase an annuity from all of the major life insurance companies. An “open market” option applies and this means that you are not restricted to purchasing the annuity from the company where you built the pension fund.. In practise, this means that you can shop around and find the company who will give you the best income.

Annuity Options

Many people buy annuities that provide an ongoing income for their spouse in case the spouse lives longer. Some people select indexation options.. Incomes for a guaranteed time period are also available

These and other options depend on personal circumstances and the income objectives at the time the annuity is being purchased.

Annuity Suitability

An annuity may suit your post retirement income needs when you would like to be certain of an income for you and your spouse or you do not want invest your pension fund in an Approved Retirement Fund. (ARF)

Annuity SummaryAnnuity decisions are closely linked to known future income requirements at retirement day. There is no need to make any decision until retirement day. Make certain that it is part of your retirement planning and options to consider but to keep everything flexible until the time the decision has to be made.

ARF’s (Approved Retirement Funds)

Having worked hard to build up your pension fund, you will more than likely want to take control and ownership of it when you reach retirement age. An ARF allows you to do just that. Provided your pension fund has been accumulated in certain Qualifying Pension Funds you can select an ARF for your post retirement investment strategy and income planning.

It is a pension investment product and returns in the fund delivers tax free growth. There are also cash withdrawal options available.

Qualifying Pension Plans

To invest in an ARF, your pension fund must have been accumulated in one or more of the following pension plans.

  • Personal Retirement Savings Plans (PRSA’S)
  • Additional Voluntary Contributions (AVC’s)
  • Occupational Pension Schemes
  • Buy out Bonds

If your pension funds are invested in more than one of these fund all accumulated funds will qualify to be invested in an ARF.

We can help you invest in an ARF now – OR – build a Pension Plan to take advantage of an ARF in the future. There are Revenue Rules and Guidelines to follow for both Pensions & ARF’s

Contact Us for information and advice. We can provide all of the advice, information and help you need to ensure that all planning is managed correctly.