Folks, Have a look at the following. the final para is interesting... ie Dept finance seem to be open to considering a change.
"DÁIL QUESTION addressed to the Minister for Finance (Deputy Michael Noonan)
by Deputy Simon Harris
REPLY.
By way of background, Approved Retirement Funds (ARFs) were introduced by Finance Act 1999 to provide control, flexibility and choice to holders of personal pensions and to proprietary director members of occupational pension schemes in relation to the drawing down of benefits from their pension plans. Prior to that Act, any person taking a pension from a Defined Contribution (DC) scheme or a Retirement Annuity Contract had no choice but to purchase an annuity with their remaining pension pot after drawing down the permissible tax-free retirement lump sum. The ARF arrangement extended the options at retirement so that, in addition to the annuity option, the balance of a pension fund could be taken in cash (subject to tax, as appropriate) or be invested in an ARF, subject to certain conditions.
The ARF option was extended, in Finance Act 2000, to the part of an employees occupational pension fund built up from Additional Voluntary Contributions (AVCs) and most recently, in Finance Act 2011, it was further extended to cover an employees entire pension fund where the fund is a defined contribution (DC) occupational pension scheme. The 2011 extension which applied with effect from 6 February 2011 (the date of passing of the Act), was in respect of DC schemes approved by the Revenue Commissioners, on or after that date, under Chapter 1 of Part 30 of the Taxes Consolidation Act 1997. Where DC occupational pension schemes had been approved by Revenue prior to that date, the legislation (section 19(7)(f) of Finance Act 2011) provided that the extension of the ARF option in such cases was conditional on the scheme rules being amended to allow a scheme member exercise the option. The 2011 Finance Act, did not, however, extend the ARF option to the main scheme benefits of defined benefit (DB) occupational schemes.
I am advised by the Revenue Commissioners, that pension retirement bonds, otherwise known as Buy-out-Bonds (BoBs), are single premium insurance policies effected by the trustees of an occupational pension scheme on behalf of a scheme member, as an alternative to providing a preserved retirement benefit under the scheme for that member. They are used in circumstances where a scheme member is leaving service and opts for a transfer value, on the wind-up of a scheme or where pension splitting arises in the context of a Pension Adjustment Order. BoBs are approved by the Commissioners on a generic, rather than individual, basis in the form of a standard bond policy document, under Chapter 1 of Part 30 of the TCA 1997 as DC products. However, in the view of the Commissioners, BoBs are not occupational pension savings vehicles in the normally accepted sense for example, an individual with a BoB cannot make contributions to the BoB. Rather, they are a specialist pension vehicle to deal with the specific situations described above.
I am further advised by the Commissioners that it has always been a condition of approval of generic BoB policies that the benefits to be provided to an individual under such policies be subject to the same restrictions and conditions that applied to the occupational pension scheme from which the transfer to the BoB originated. This includes access to the ARF option. The entitlement to the ARF option, in effect, travels with the transfer value paid into the bond and the fact that the BoB is considered a DC pension product does not, of itself, give entitlement to the ARF option from the BoB as of right. Thus, prior to the Finance Act 2011 changes, the ARF option only applied to benefits under a BoB where the bond holder could have availed of the option under the originating occupational pension scheme, e.g. that the bond holder was a proprietary director before leaving service or that part of the originating transfer represented AVCs. There was no alteration in this position following the Finance Act 2011 changes.
Thus, transfers to BoBs from DB schemes generally, do not have access to the ARF option and transfers from DC schemes that took place either prior to the change in the law in Finance Act 2011 or prior to the required change in the DC scheme rules to permit the ARF option, do not qualify for the option.
In this regard, the question of ARF access from BoBs was specifically considered, in the context of the National Pensions Framework published by the previous Government, by the Implementation Steering Group tasked with progressing the Framework s proposals in relation to flexible options in retirement. In recommending the extension of the ARF option to DC main scheme benefits, the Implementation Steering Group endorsed the then existing position in relation to BoBs i.e. of linking ARF access to the underlying occupational pension scheme from which the transfer value came. In the context of BoBs originating from DB schemes in particular, endorsement of this restrictive stance reflected broader policy concerns about the possible impact that accessing the ARF option by the back door through BoBs might have on DB schemes generally.
Notwithstanding the foregoing, the issue of permitting BoB access to the ARF option continues to be raised with my Department and the Revenue Commissioners by representative bodies in the pensions sector. Following a recent meeting in that regard with Insurance Ireland, officials of my Department and the Revenue Commissioners have, without prejudice, undertaken to examine the issue further in conjunction with the Department of Social Protection and the Pensions Board who also have an interest in the broad policy in this area. I will consider any recommendations that may arise from that examination."