Michael McGrath (Cork South Central, Fianna Fail)
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177. To ask the Minister for Finance the number of approved retirement funds in operation here; the annual income tax take from approved retirement funds; and if he will make a statement on the matter. [45885/14]

Michael Noonan (Limerick City, Fine Gael)
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Approved Retired Funds (ARFs) form part of the regime of flexible options on retirement first introduced in 1999. They are investment options into which the proceeds of certain pension arrangements can be invested on retirement. Under the "ARF option" individuals are entitled, subject to conditions, to take their retirement lump sum and, with the balance of their pension fund, either purchase an annuity, invest in an ARF or take the balance in cash subject to tax. Where the ARF route is chosen, beneficial ownership of the assets in the ARF vests in the individual.

ARFs are managed and held by Qualifying Fund Managers and any investment income or capital gains arising is exempt from tax while the funds are invested in the ARF. Distributions or drawdowns from the ARF by the beneficial owner are subject to income tax at the owner's marginal rate.

I am advised by the Revenue Commissioners that there is no requirement on Qualifying Fund Managers (QFMs) who hold and manage ARFs on behalf of individuals to make returns to Revenue in relation to the number of ARFs under management or the value of ARF assets held by them. I am further advised that, as the income tax take from actual drawdowns from ARFs forms part of the total income tax take and is not readily identifiable within that overall income tax yield, it is not possible to provide the data requested by the Deputy.

Separate tax collection data is available on the tax paid by QFMs on imputed or notional distributions from ARFs and "vested" PRSAs. The deemed or imputed distribution arrangements were introduced in Budget and Finance Act 2006 to encourage drawdowns from ARFs and 'vested' PRSAs (to which the notional distribution arrangements were extended in Finance Act 2012) so that they are used, as intended, to fund a stream of income in retirement. The imputed distribution arrangements, under which a percentage of the value of assets in an ARF or "vested" PRSA is deemed to be distributed each year (unless sums equivalent to that value are actually drawndown), are not intended to nor do they give rise to significant tax revenues as they do not apply to actual draw-downs from ARFs and 'vested' PRSAs which are taxed in the normal way. By way of indication, the amounts received by the Revenue Commissioners from tax paid on imputed distributions has averaged about €4 million per annum in the period 2007 to 2013.