Discussion in 'Pensions' started by Daddy Ireland, 12 Feb 2019 at 4:30 PM.
I turn 60 in May. From what date must I withdraw the minimum 4% ?
Sorry, found the answer elsewhere.
What was it?
I must be 60 for one year. So in effect 4% to be taken by 31/12/20.
Yes, the language in the legislation is pretty obtuse; it’s the first year in which the ARF-holder is 60 for the whole year.
So basically the year in which he or she turns 61.
That is, unless he or she was born on 1 January, in which case it’s the year he or she turns 60!
A follow on from this. When is the 4% minimum amount calculated?
Jan 1st = €200,000
Dec 1st = €220,000
I would expect it to be based on the Opening amount i.e Jan 1st but can't seem to find confirmation of this
"The main pension changes were confirmed / clarified in the Finance Act 2012 – these were previously announced in the Budget and Finance Bill 2012. ARFs With effect from 2012 the annual imputed distribution which applies to the value of assets in an Approved Retirement Fund (ARF) is to be increased from 5% to 6% in respect of ARFs with aggregate asset values in excess of €2 million. As soon as the asset values exceed €2 million, then the increased rate of 6% applies to the total value and not just the excess amount over €2 million. The imputed distribution valuation date has been moved forward to 30th November (previously 31st December), and there are specified timings relating to the production of a Certificate confirming values to the nominated Qualifying Fund Manager (QFM) / PRSA Provider if there is more than one ARF / Vested-PRSA and the aggregate value is over €2 million."
Yet to have a retiring client who was born on 1 January and get hit with this
The imputed distribution valuation date used to be 31 December but the QFMs gave out about the logistics of managing this over the Christmas period when most of the country shuts down. The Revenue were fairly lenient and allowed any date in December before it was switched to 30 November. Any ARF's set up in December aren't subject to imputed distribution in that year.
If you are taking a regular withdrawal from your ARF, the QFM will calculate the value as at 30 November. If the amount you have taken out is less than 4% at that date (if fund has grown in value since the start of original withdrawals), they will pay the balance as a lump sum.
As an aside, was explaining the retirement options to a client this afternoon. They really need to simplify them, they are far too confusing for people to understand and far too many caveats. They just don't make and sense. They can start with getting rid of the AMRF if you don't have a guaranteed pension income of €12,700 a year, you must put €63,500 into an AMRF, which you can only draw down 4% once a year (or not at all if you don't want to). You can also use that €63,500 to purchase an annuity to satisfy the rule. But €63,500 won't buy you an annuity of €12,700 a year. If you get the full State pension, that will satisfy the €12,700 rule, otherwise you have to wait until you are 75, when you can draw down as much as you want and will become an ARF and subject to imputed distribution. But the imputed distribution of 4% that we talked about is actually 5% for over 70s )
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