Bernard Durkan (Kildare North, Fine Gael)
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50. To ask the Minister for Finance the steps he will take to address the plight of those with AMRFs who cannot currently access more than 25% of their savings other than by way of a nominal monthly payment of less than €200 unless they have a guaranteed independent pension income of €12,700 per annum; the number of such schemes currently in operation; if they continue to be created; and if he will make a statement on the matter. [46515/14]

Michael Noonan (Limerick City, Fine Gael)
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In my response to the Deputy's question of 4 November last on the same broad issue (question order number 335), I outlined the various options available to individuals at retirement in relation to their Defined Contribution pension savings other than the immediate purchase of a pension annuity with those funds (after taking their tax-free retirement lump sum).

I would reiterate that the purpose of the supplementary pensions saving arrangements (and the tax incentives available for such arrangements) is to encourage individuals to provide over their working lives for an adequate pension income over the period of their retirement. The flexible options at retirement introduced and expanded over time in relation to Defined Contribution (DC) pension savings, and which I have outlined in the previous response to the Deputy (including the option and conditions relating to investment in an Approved Minimum Retirement Fund or AMRF), are designed to facilitate this purpose.

The option to take the balance of any DC pension savings (after the tax-free lump sum)  as a single taxable lump sum amount or, alternatively, by way of investment in an Approved Retirement Fund  or ARF is conditional on the individual having attained the age of  75 years or, if younger, having pension income in payment for life of €12,700 per annum at the time of exercising the option (which pension income could include a pension paid by the State). If these conditions are not satisfied, an individual must either invest in an AMRF or purchase a pension annuity with the remaining pension funds. These various requirements are in keeping with the aim of ensuring that individuals have a source of pension income over the entire period of their retirement.

In this year's Finance Bill, I have introduced an option to allow AMRF owners to draw-down up to 4% of the assets of such funds each year. This is primarily aimed at those individuals whose AMRF constitutes a significant part of their retirement funds and who, while not wishing to purchase a pension annuity with those funds, may require access to a portion of these funds to boost their existing income and provide a more certain form of  income prior to reaching age 75. This change has been welcomed as improving the accessibility to pension savings, particularly of those with lower pension fund values at the point of retirement. I have no plans for further changes in this area at this time.

There is no requirement on Qualifying Fund Managers who hold and manage AMRFs on behalf of individuals to make returns to my Department or to the Revenue Commissioners in relation to the number of AMRFs under their management. I am not in a position to say, therefore, how many AMRFs are in place. I understand anecdotally, however, that investment in an AMRF is viewed by many at this time as a preferable option to the immediate purchase of a pension annuity. The funds in an AMRF can be used at any time to purchase a pension annuity and the AMRF automatically becomes an ARF with unfettered access to the funds, subject to taxation, when the beneficial owner reaches age 75 or satisfies the pension income requirement, if sooner.