Revenue has published eBrief No. 72/11 which confirms that, in the case of Buy-Out-Bonds (BOBs) that access to the Approved Retirement Fund (ARF) option follows on from the occupational pension scheme arrangement from which the transfer value originated.

In eBrief 72/11, Revenue confirms that in relation to the ARF option on the transfer of main occupational pension scheme benefits to BOBs:

• The ARF option is available in respect of transfer values from defined contribution (DC) occupational schemes; where the scheme member meets the proprietary director test before the date of transfer, and in any other case, where the transfer takes place on or after 6 February 2011 and the scheme rules have been amended to provide for the option before the date of transfer.

Main scheme transfers to BOBs from DC schemes before 6 February (other than in the case of proprietary directors) do not attract the ARF option.

• And in the case of defined benefit (DB) schemes the ARF option is available in respect of transfer values from defined benefit occupational schemes to a BOB where the scheme member meets the proprietary director test before the date of transfer.

Any other main scheme transfers to a BOB from a DB scheme do not attract the ARF option.

Members may recall that Finance Act 2011 extended, with effect from 6 February 2011, the ARF option to the main benefits arising under DC occupational pension schemes. It did not extend the option to the main benefits of DB occupational schemes. Prior to this change, the ARF option could only be availed of in respect of additional voluntary contributions and by proprietary directors in respect of their main scheme benefits (whether they were in DB or DC arrangements).

The full text of eBrief No. 72/11 is available here http://www.revenue.ie/en/practitioner/ebrief/2011/no-722011.html