Pension Lump Sums

The amount of lump sum you can take out of a pension arrangement is limited, with different rules applying depending on the type of arrangement you have.

For RACs, PRSAs and people transferring to AMRF/ARFs at retirement, the lump sum limit is 25% of the retirement fund.

For a defined benefit occupational pension scheme you may be able to take 1.5 times your final remuneration as a lump sum, if you have completed 20 years’ service and have no benefits from a previous scheme.

For a defined contribution scheme, the amount of lump sum available to you depends on whether you choose to take your benefits in the form of an annuity or an AMRF/ARF.

Currently, a maximum of €200,000 can be taken as a tax free pension lump sum. This is a total lifetime limit even if lump sums are taken at different times and from different pension arrangements. Lump sums between €200,001 and €500,000 are taxed at 20%, with any balance over this amount taxed at your marginal rate and subject to the Universal Social Charge.