The pensions industry is full of acronyms and AMRF & ARF are no exception.

They stand for Approved Minimum Retirement Fund & Approved Retirement Fund.

Similar in name but do not have the same ruleset.

An easy way of thinking about is the ringfenced amount of your pension. Legislation states that where you do not have a guaranteed income of €12,700 per annum you must invest into an AMRF.

This AMRF will be a minimum of €63,500.

Once you have satisfied these rules you can invest the remainder of your pension in an ARF.

If you are looking for some more information on either it is probably best to speak with an expert.

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Introduction to ARFs & AMRFS

Approaching retirement can be quite daunting. When it comes to your pension, deciding what to do after you have taken your tax-free lump sum can be confusing. ARFs & AMRFs, what are they? We have broken down each and explained the rules and stipulations involved.

Some individuals will use one of these vehicles and will use both. Luckily, we took the time how each works and what your options are.

What is an AMRF?

Let’s take a look at AMRFs. It is a plan that allows you to invest your pension after you have taken your retirement lump sum. Current Revenue rules stipulate the following:-

  • Where an individual does not have a guaranteed income of €12,700 &
  • Has not previously invested €63,500 into an AMRF

This individual must invest their matured pension amount to a minimum of €63,500 into an AMRF or purchase an annuity.

This is revenue way of ensuring you have a ringfenced amount in retirement.

Our team of advisors specialise in retirement planning and have over 100 years of industry experience.

We are always willing to help you take control of your retirement and put a long-term plan in place.

What is an ARF?

Once you have satisfied the above conditions, the remainder of your fund can now be invested into an ARF.

An ARF works by allowing you to invest all or part of your pension fund after you retire. It will be your choice as to what type of fund(s) you would like to invest in.

However, these decisions can be difficult, so probably best your recruit an expert. Luckily, we work alongside some of the best in class!


  • The major difference between an ARF & AMRF is access. Again, they both play by a different ruleset. In an AMRF, Revenue rules state you can only withdraw up to 4% of the fund value each year until age 75. However, once you reach age 75, your AMRF will automatically convert to an ARF.
  • With an ARF you have a lot more control along with full access to your fund. The money is readily available. However, it is worth noting withdrawals are treated as income and taxed under the PAYE system.
  • With an ARF you run the dreaded risk of ‘bombing-out’. It is always advised to speak with an expert and plan for the retirement you would like.

Tax on ARFs

Taxes, we know, no escaping them! However, hopefully your fund has been invested wisely and is performing well.

When an owner of an ARF (you) reaches 61 years of age, what’s called an imputed distribution kicks in. The imputed distribution is calculated as a percentage (4%) of the market value of your ARF fund on 31st December each year.

The imputed distribution then rises to 5% from age 71. Essentially, this means you have to withdraw a minimum of 4% or 5% depending on your age.

Advantages of ARFs

Some of the advantage of having an ARF are the following:-

  • Flexibility, you can have as much involvement and control with regard to fund choices as you would like.
  • You can withdraw as much as you would like from the remaining amount.
  • Growth within your ARF is tax-free (withdrawals are taxable).
  • Multiple investment options.
  • On death, the full value of your fund will pass to your spouse. If they die, ARF crystalizes and passes to your children (30% tax payment)

Disadvantages of ARFs

As you have discovered by now, we are all about transparency around here, so lets take a look at some of the potential disadvantages.

  • Your fund is not guaranteed to keep its value and may underperform.
  • Similar to the above, your fund may eventually run dry.
  • Some ARFs may have high ongoing charges ( this is where a good advisor comes in handy).
  • Imputed distribution of 4% or 5% along with income tax and USC.

Speak to an Experienced Advisor

We work alongside a team of Qualified Financial Advisors who hold over 100 years combined industry experience.

Contact: 01 890 3815


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