While there was little in Budget 2015 on pensions, the Finance Bill 2014, published 23 October, included a number of changes affecting pensions, in particular Approved Retirement Funds(ARFs), Approved Minimum Retirement Funds (AMRFs) and vested-Personal Retirement Savings Accounts (PRSAs).

Below is a brief overview outlining the main pension-related features of the act.

Minimum Income Withdrawal

In 2015 there will be a change to the Minimum Income Withdrawal percentage. This applies to the value of ARFs, and also to the value of vested-PRSAs in excess of the restricted fund (i.e. the value of vested-PRSAs above the AMRF requirement if applicable).

Going forward the percentage will be:

• No minimum income withdrawal is required until the year in which the client turns age 61
• From the year the client turns age 61 the minimum income withdrawal is 4%
• From the year the client turns age 71 the minimum income withdrawal is 5%
• If the total value of ARFs and vested-PRSAs (less restricted fund) is over €2 million, then from the year the client turns age 61 the minimum income withdrawal is 6%. The percentage remains at 6% when the client turns age 71

There is no change to the valuation date of 30 November. The effective date of this change is 1 January 2015, and so it appears there is no change to the 5% minimum income withdrawal for 2014.

AMRF Withdrawal

Currently any growth in AMRF value over the initial investment amount can be withdrawn by the client. This option is being removed. Instead the client will have the option to withdraw 4% of his AMRF value in any one year. This will be based on 4% of the value as at 1 February in that year. The proposed date for this change is 1 January 2015. AMRF withdrawals continue to be treated as taxable income.