Personal Retirement Bond (PRB)
A Personal Retirement Bond (PRB) is a single premium pension contract set up by a former member of an employer-sponsored occupational pension scheme for their benefit on leaving the scheme. The value of their fund on leaving the company pension scheme is invested in the PRB in their own name. It is then an individual / personal contract between the holder and the pension provider. On retirement, the holder of the bond can use the proceeds of the PRB to provide their retirement benefits.
How does it work?
As one of only a small number of self-invested Personal Retirement Bond providers in the Irish market, the distinct advantage of our PRB contract is the flexibility of investment options. The holder of an NRFM Self-Invested PRB is not tied to an age/risk-related ‘lifestyle’ investment strategy or a strategy defined by trustees and previous employers. The PRB holder makes his or her own investment decisions and retains control of their retirement fund.
On retirement, the bondholder is entitled to the same options with their fund as they had under their previous employer’s pension scheme. It is usually permissible to retire from a PRB at the age of 50 years and onwards subject to Revenue rules.
There is a limit on the maximum fund that can be built upon retirement. This is currently €2,000,000. This figure includes all of your pension funds, including the capital value of any retirement benefits drawn down since 7 December 2005. Where the relevant limit is exceeded, the excess of your pension fund at retirement will be liable to a once-off Income Tax charge at a higher rate of tax.
In the event of your untimely death, the value of your PRB will be paid to your estate assuming it is deemed a preserved benefit under the Pensions Act.