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). 

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.

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.


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.


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:


Personal Retirement Savings Accounts

PRSAs are a way for people who are not members of company pension schemes to save for retirement.

It is hoped PRSAs will increase the proportion of the Irish workforce with a private pension from 50% to 70%. A review of PRSAs took place in 2006.

From the 15th of September 2003, employers who do not offer a pension, or who exclude employees with more than 6 months' service, must select at least one standard PRSA and deduct contributions from payroll at employees' request.

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.

State Pensions

Qualified Pay Related Social Insurance (PRSI) contributors are entitled to a contributory retirement pension (if they have retired by age 66) or an old age pension (payable from age 66).  A surviving spouse's pension is payable if a qualified contributor dies, either before or after retirement.  Pensions consist of a personal entitlement and dependants' allowances (allowances for adult dependants are means tested).

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