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What is the Praxis Plan?
The Praxis Plan is a self administered Approved Retirement Fund (ARF) and a self administered Approved
Minimum Retirement Fund (AMRF).
What is an ARF?
An ARF is a special investment fund which can give flexibility in terms of how you use your retirement fund. With
an ARF you re-invest your retirement fund and take the money out as you need it. The Praxis Plan allows you to
take control over where these funds are invested. An ARF is provided by a Qualifying Fund Manager (QFM) such as
Harvest Financial Services Limited (HFS).
What is an AMRF?
In order to establish an ARF you must have a guaranteed pension income for life of €12,700 per year (from pension
sources other than your ARF investment). If you do not, you must invest €63,500 of your pension fund into an
AMRF until age 75 or buy an annuity with that amount. Once you have put this money in an AMRF or an annuity
you can invest the balance into an ARF. With effect from the 1st of January 2015 AMRF holders have the option of
withdrawing up to 4% per annum of the value of their AMRF at date of drawdown. Appropriate statutory
deductions (PAYE, USC and PRSI) will apply to any withdrawal. There is no obligation on AMRF holders to take
this withdrawal.
What are the benefits of the Praxis Plan?
The Praxis Plan provides a variety of benefits to you in retirement:

you have access to a wide variety of investment options and providers;

you can invest your funds in investments that fit your risk appetite;

your investments grow free of both income tax and capital gains tax;

you choose when to withdraw funds from your ARF and how much you take*; and

on death, your Praxis Plan can pass to your estate.
*How do I take income from the Praxis Plan?
You are required by the Revenue Commissioners to take a minimum distribution from your ARF annually once you
are over age 60 for a whole tax year. This can be paid monthly, quarterly or annually. You can also make
withdrawals from your ARF as needed, subject to statutory deductions. Appropriate statutory deductions are
deducted on withdrawals from your ARF by HFS as the QFM. With effect from the 1st of January 2015 the
minimum distributions from the Praxis Plan once you are over age 60 for a whole tax year are as follows:
 4% if you are not aged 70 years or over for the whole of the tax year and the value of your ARF is less than
€2,000,000
 5% if you are aged 70 years or over for the whole of the tax year and the
value of your ARF is less than €2,000,000; and
 6% if the value of your ARF exceeds €2,000,000.
If you do not take a distribution in any given tax year there will be a tax bill
due from your ARF. This is remitted in February of the following year for
the imputed tax due on 4% / 5% / 6% of your ARF and based on the value
as at the preceding 30th of November. There would be no income
receivable on this amount, but the QFM will deduct and remit appropriate
statutory deductions due. As your ARF will have already paid tax on this
amount and you never received any income a double taxation situation
arises. It is therefore advisable for you, where possible, to take an actual
distribution of at least the minimum required amount annually.
What happens to the Praxis Plan when I die?
On your death your Praxis Plan can be transferred to your spouse / civil
partner tax-free who can continue to manage the Praxis Plan investments
and make withdrawals from the Praxis Plan. Alternatively your Praxis Plan
can be left to your children or other persons subject to income and / or
inheritance tax.
What can I invest in?
The investment choice is ultimately down to you, subject to certain
Revenue rules. Some of the assets HFS clients invest in are:
• property (ungeared);
• personalised equity portfolios;
• corporate and government bonds;
• international funds;
• private equity; and
• deposits.
Why set up a Praxis Plan?
HFS has been providing self administered retirement solutions to clients
since 1993. HFS administers over €800 million in retirement funds on
behalf of our clients (figure correct as at April 2015). As an independent
company, HFS is uniquely positioned to provide you with the broadest
possible range of investment options.
Whether you want the investment flexibility and / or the cost transparency
of the Praxis Plan, HFS will work with you to maximize the benefits of the
Praxis Plan to secure your income in retirement. For more information, or
to arrange a meeting to discuss the suitability of the Praxis Plan for your
retirement provision needs, please contact Emer Kirk on 01 2375500 or
justask@harvestfinancial.ie.
Warnings: If you invest in the Praxis Plan you may lose some or
all of the money you invest. The income you get from the Praxis
Plan may go down as well as up. Unless the remaining capital
grows at a rate at least equal to the rate of regular withdrawals,
your capital will be reduced and could eventually be exhausted
altogether.
Please note that the provision of this product or service does not
require licensing, authorisation, or registration with the Central
Bank of Ireland and, as a result, it is not covered by the Central
Bank's requirements designed to protect consumers or by a
statutory compensation scheme.
The information contained herein is based on Harvest Financial
Services Limited's understanding of current Revenue practice as
at April 2015 and may change in the future. The material is not
intended to provide advice and is provided for general
information purposes only.
Intended for distribution within the Republic of Ireland.
13.04.04.15.