Retirement Fund Restructure Case Study

Case Study – Why is my ARF not increasing in value?
Retired Company Director aged 68, Widowed
Maeve from Carlow

Maeve had retired from her own company aged 60. She accessed her pension at that time and after taking a tax-free lump sum from the pension she also had an ARF valued at €210,000.

When we first started working with Maeve in 2017 she wanted to understand why her ARF had not risen in value in light of the fact that the underlying investment growth on the fund was circa 6% per annum, and Maeve was only taking income from the ARF of about 4% per annum.

Once we reviewed Maeve’s circumstances, we took the following actions:

The annual management fee on Maeve’s original ARF was 1.75% per annum. This explained why the ARF fund struggled to gain in value.

ARF Ireland managed to negotiate a lower fee of 1.25% per annum (including ARF Ireland annual advisory fee) which would yield a reduction of 0.5% or €1,050 over 1 year based on a fund value of €210,000. This 0.5% reduction would also apply annually so Maeve would, over time, hope to see considerable savings.

We transferred Maeve’s existing ARF to a new ARF Provider to secure the lower fee and we reviewed the performance of Maeve’s ARF with her every 9 months.

If you are unsure or unhappy about your existing ARF arrangements click here to find out what you can do? Feel free to call us for advice on 053 9110380 today.