Extension of ARF option announced
The Institute welcomes the statement by Minister Michael Noonan TD, that with effect from 22 June, holders of buyout bonds ( formally called “approved policies” and often referred to as Personal Retirement Bonds) will have access to the post-retirement investment option , Approved Retirement Funds (ARFs). Previously, these were accessible only to holders of Personal Retirement Savings Accounts, Certain Defined Contribution pension schemes, and holders of additional voluntary contributions (AVCs).
The majority of those in buyout bonds were there through no desire of their own – most were purchased by the trustees of pension schemes in winding-up, though some were the result of Pension Adjustment Orders following separation or divorce.
IIPM and its members have been campaigning for a number of years to have these bonds recognised as what they are – defined contribution pension arrangements. The legislation under which these bonds are approved has outlived its usefulness and we are pleased that the Minister has recognised the fairness of permitting access to ARFs for bond holders, particularly in the current climate of low interest rates, where compulsory annuity purchase makes no sense from either the State’s or the bond-holders point of view.