Meet Pat – A Company Director, 62
Pat had a Company Pension Fund of €640,000. He wanted to access his pension because he was reducing his involvement in his business. His daughter was taking more responsibility, and Pat would eventually transfer his shareholding to her.
Pat was unsure what his pension options were, and if he could access his pension whilst still being employed and involved in his business.
We took the following actions:
1. Pension Access
Yes, he could access his Pension without having to retire from his business.
2. Tax Free Lump Sum
He was able to access 25% of his pension as a tax-free lump sum = €160,000 (€640,000 x 25%).
2. Pension Options
The remainder of his pension, €480,000, was invested in an ARF, which was set up via ARF Ireland.
4. ARF Income
The ARF obligatory income requirement of 4% of the ARF value (€19,200) was acceptable to Pat as he was going to be taking circa €20,000 less income from the business anyway as a result of his reduced involvement.
5. ARF Inheritance
The ARF would also pass to Pat’s wife in the event of Pat's passing away, which was very important to Pat and his wife.
6. Pension Options
Pat was intent on reducing his involvement completely in the business by age 65 and would also then stop taking an income from the business.
The solution
We were able to show Pat the recommended sustainable level of income he should take from his ARF so that it could reasonably be expected to provide him with income up to age 90.
See our page with the explanation as to what happens when you access a pension