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Ireland:
Recent developments
Over the last year, the Minister for Finance has made radical changes to the way in which pension benefits for the self employed and proprietary directors are delivered. Subject to securing a relatively low annual income, individuals now have almost complete freedom on how they choose to use the balance of their retirement fund. Instead of having to purchase an annuity, they may now opt to cash in their fund (subject to tax) or transfer money into a new product called an Approved Retirement Fund which is effectively an income drawdown fund. Any drawdown from initial capital or generated income/gain is subject to tax. This change effectively allows individuals to use their pension fund as an investment portfolio in retirement and represents a massive cultural change as retirees are now being allowed to retain ownership of their pension funds post retirement.
There has been a comprehensive review of the existing Irish pension framework called the National Pension Policy Initiative. Recommendations resulting from this review are likely to be included in legislation in the near future.
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