Introduction to Pensions

Providing for retirement is a very important issue if the end of employment is not to be followed by a significant decline in living standards. Apart from the value in a house, few people are able to save much during their work lives. The erosion of the real value of State Retirement Benefits combined with greater life expectancy highlights the importance of pension planning. The Central Statistics Office 2011 Survey reports that the average life expectancy for men in Ireland is 76.8 years, whilst for women the average life expectancy is 81.6 years Source: Irish Times HEALTHplus 23/08/2011). 

Company Pensions

An Occupational Pension which is more commonly known as a Company Pension is setup under a Trust by an employer (company or individual) to provide retirement and/or death benefits for employees (including Directors) and has to be exempt approved by the Revenue. Company Pension arrangements can include any number of members from one upwards.

Funding For Your Pension

The Business person must plan at some point in time for provision of income at retirement for oneself, and maybe his/her dependents. Also the substantial tax relief on pension contributions should be taken up.

When it comes to deciding on taking out a pension plan, you should compare all the pension companies and their plans. Your main concern should be to obtain the largest pension fund possible to draw on at retirement.

Additional Voluntary Contributions AVCs

An AVC is a voluntary contribution made by employees in addition to the required contributions if any, that are to be made to their company pension schemes. Generally, an AVC is made to take advantage of the tax benefit and to also improve the benefits available at the time of retirement. AVCs are subject to Revenue limits.


In the Finance Act 1999, the Minister for Finance introduced significant changes to a) the tax rules applying to pension contributions by self-employed persons and employees without a company pension, and b) the options available at the time of retirement.

In the Finance Act 2000, the Minister extended the benefits of the new system beyond individuals with retirement annuities or directors who controlled more than 20% of the voting rights in their company to:


An ARF (Approved Retirement Fund) and AMRF (Approved Minimum Retirement Fund) are funds managed by qualifying fund managers in which you can invest the proceeds of your pension fund. Your pension fund is the proceeds of a Retirement Annuity Contract as it matures. For a proprietary director, the pension fund will be the value of the pension entitlement.

From 2022 there is no longer any requirement for an AMRF.

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