Pension Plans

Pensions

What do you want to do when you retire?

Most people will say they simply want to be comfortable and financially secure. At Farrell Financial Services we think you should be a little more ambitious. After all, you have worked all your life so why not plan for retirement as something special, something to really enjoy?

A pension is simply a tax-efficient plan for the investments you hold to fund your retirement. To make sure your plan offers you the highest levels of flexibility, transparency and value for money, you need to look at the options offered by various Providers. As Financial Brokers we advice from different providers to suit your risk profile and budget.

Planning

Retirement planning is spilt into two phases:

Accumulation stage
Retirement stage

During the accumulation stage, you need to ensure you have adequate pension provision and also need to consider the tax implications. We can review existing pensions and advise on new plans where necessary.

We often find, particularly with old-style pensions, that charging structures are too high, which can significantly affect the end payout. Our focus lies with ensuring plans provide the benefits required with minimal charges.

As we offer comprehensive financial planning advice, we can also make sure your finances are as tax efficient as possible and can recommend ways to combine tax and pension planning for individuals, partnerships and companies to make the most of all possible tax saving opportunities.

Range of Pensions

Personal Pension Plans

If you are self-employed or working as a sole trader, you can have a personal pension plan to provide you with financial security when you retire with the benefit of immediate financial reward – every euro you save reduces your income tax bill.

PRSA

A PRSA is a Personal Retirement Savings Account. It’s a portable retirement account so you can take your PRSA with you when you change job. Your employer can contribute to your PRSA, unlike a personal pension where employers can’t make contributions.

Additional Voluntary Contributions (AVCs)

If you are a member of an occupational pension scheme, then you may be in a position to improve the benefits you receive on retirement by making AVCs through a PRSA.

Executive Pension Plans

An effective retirement planning tool that enables business owners, company directors and key employees to plan for their retirement in a tax efficient manner.

Company Pension Plans

In a company pension plan your employer must pay at least one-sixth of the total amount into your pension plan with you. Your employer will get tax relief on this money paid in for you, making it a very tax efficient way to reward employee’s loyalty.

Additional Voluntary Contributions (AVC)

If you are in a company pension plan and would like to increase your retirement benefits to get a better pension you can make ‘Additional Voluntary Contributions’ with your employer’s permission.

Retirement bond

A retirement bond lets you take your pension entitlement with you when changing job without having to transfer to your new employer’s pension scheme.

Benefits:

no need to transfer to your new employer’s pension scheme
choose the fund that your money is invested in
choose when to take your benefits
any investment growth is tax-free

Approved Retirement Funds

With an Approved Retirement Fund you manage and control your pension fund after retirement. You can make withdrawals at any time, subject to the terms of your chosen investment option. These withdrawals are liable to income tax.

You can invest the proceeds of your pension fund in anApproved Retirement Fund (ARF) after you retire.

Benefits:

Regular income from this fund
Control over your investments
The funds in your ARF are available to your family after your death

If your guaranteed annual income is under €12,700 you must take out an Approved Minimum Retirement Fund (AMRF) first. €63,500 of your retirement fund is put in the AMRF and the rest into an ARF.

Options at Retirement

Now that you’re about to retire, you have one more important decision to make – how to use your pension fund to provide yourself with an income throughout your retirement.

Depending on your circumstances as you approach retirement, there are different options for you to consider.

You have the option to take a tax-free lump sum and use the balance to:

Purchase a pension (Annuity)
In certain circumstances you can invest in an Approved Retirement Fund (ARF)
In certain circumstances you can take a taxable lump sum

Annuity

No matter what type of pension plan you have, you have the option of using some (or all) of your retirement fund to purchase a pension. This will provide you with a regular secure source of income for the rest of your life.

Approved Retirement Fund (ARF)

An ARF may be an option for you on retirement.

The benefits of investing in an ARF are:

You can manage and control your retirement fund
Invest in a range of different investment funds tax-free
You can set up an ARF to pay you a regular income
You can make withdrawals, as and when you require
You can pass it onto your dependants

Taxable Lump Sum