From 22 June 2016, Revenue practice for retirement options on the treatment of Personal Retirement Bonds (PRB’s) for former members of Defined Benefit schemes has changed.
Previously, these policyholders had to take benefits under the ‘traditional’ revenue formula of:
- a lump sum based on salary and service from the previous employer, and
- the remainder of the fund had to be used to purchase an annuity.
Thankfully, these policyholders now have access to the ‘alternative’ retirement options, which allow for:
- a lump sum of up to 25% of the fund to be taken, and
- the remainder to be invested in an Approved Retirement Fund (ARF) or an Approved Minimum Retirement Fund (AMRF), or to purchase an annuity.
This is a very welcome change, and one that the pensions industry has been lobbying for in recent years. This finally allows former DB members the same retirement flexibility that other pension policyholders have had for some years now. Please contact us if you have any questions at all regarding this change.