Pensions are full of confusing acronyms and technical terms. Here's every term you'll encounter, explained in plain English. Use the search box to find what you need.
AMC (Annual Management Charge)The yearly fee your pension provider charges for managing your fund. Expressed as a percentage of your pot. For example, a 1% AMC on a €100,000 fund means you pay €1,000 per year in charges. Lower is better.AMRF (Approved Minimum Retirement Fund)A special retirement fund you used to be required to keep until age 75 (or until you had guaranteed income of €12,700/year). Abolished in 2021 — you no longer need to ring-fence any minimum amount.AnnuityA product you buy at retirement that pays you a guaranteed income for life. You hand over your pension pot to an insurance company and they pay you a fixed amount every month/year until you die. Safe but inflexible — once bought, you can’t change your mind.ARF (Approved Retirement Fund)A post-retirement investment account. Instead of buying an annuity, you can move your pension pot into an ARF and draw down income as needed. More flexible but your money remains invested (and at risk). Most retirees now choose this over an annuity.Auto-EnrolmentIreland’s new system (from 2026) where qualifying employees are automatically enrolled into a pension. You contribute, your employer contributes, and the state tops up. You can opt out, but you’d be walking away from free money.AVC (Additional Voluntary Contribution)Extra contributions you make on top of what you and your employer normally pay into a workplace pension. AVCs get the same tax relief as regular contributions and let you boost your pension pot.Contribution ChargeA fee taken from each contribution you make (e.g., 5% of every payment). Standard PRSAs cap this at 5%. Many providers now charge 0% contribution charges in exchange for a slightly higher AMC.Defined Benefit (DB)A pension scheme where your retirement income is guaranteed based on a formula (usually final salary × years of service × a fraction). Your employer bears the investment risk. Mostly found in the public sector now.Defined Contribution (DC)A pension scheme where you and your employer put in defined amounts, but the final pension depends on investment performance. You bear the investment risk. The most common private-sector pension type.DrawdownTaking money out of your pension. From age 50 (occupational) or any time after 60 (PRSA/RAC), you can start drawing down. Usually you take a tax-free lump sum first, then draw regular income from an ARF.Earnings CapThe maximum salary figure used to calculate your tax relief limit. Currently €115,000. If you earn more, the excess is ignored for pension tax relief purposes.Executive PensionA pension scheme set up by a company specifically for a director or key employee. Allows very high employer contributions and is the most tax-efficient way for company directors to extract profits.Fund ChoiceThe range of investment funds available within your pension. Options typically range from low-risk (cash, bonds) to high-risk (equities, property). Younger savers usually benefit from higher-risk funds.Imputed DistributionA rule that forces ARF holders to withdraw (and pay tax on) a minimum percentage each year — 4% from age 61, rising to 5% from age 71, and 6% from age 81. Designed to ensure retirees actually use their pension savings.MyFutureFundThe branding name for Ireland’s auto-enrolment pension scheme, managed by NAERSA. Has ultra-low charges of 0.10% AMC.NAERSANational Auto-Enrolment Retirement Savings Authority — the state body that manages the auto-enrolment pension system (MyFutureFund).Net Relevant EarningsYour income figure used for calculating pension tax relief. For employees, it’s basically your gross salary. For self-employed, it’s your net profit from your trade or profession (after allowable expenses but before tax).Normal Retirement Age (NRA)The age your pension scheme expects you to retire. Typically 65 or 66 for occupational schemes. You can often access your pension earlier (from 50-60 depending on type), but your NRA affects benefit calculations.Occupational PensionA pension scheme set up by your employer. Can be defined benefit (guaranteed payout) or defined contribution (investment-dependent). Your employer usually contributes alongside you.Passive Fund / Index FundA fund that simply tracks a market index (like the S&P 500 or MSCI World) rather than trying to beat it. Usually has much lower charges than actively managed funds. Evidence shows passive funds outperform most active funds over the long term.Preserved BenefitA pension benefit you’ve built up with a previous employer that’s sitting there waiting for you. You can’t access it until retirement age, but you can transfer it to your current pension.PRSA (Personal Retirement Savings Account)A personal pension product available to anyone. Portable (moves with you between jobs), regulated, and comes in two types: Standard (fee-capped) and Non-Standard (uncapped fees but more investment options).RAC (Retirement Annuity Contract)A personal pension for the self-employed. A legacy product that predates PRSAs. No fee caps. Being gradually replaced by PRSAs, but many are still active.Revenue CommissionersIreland’s tax authority. They set and enforce the rules around pension tax relief, contribution limits, and retirement options.Standard Fund Threshold (SFT)The maximum value your pension fund can reach without triggering an extra tax charge. Currently €2.2 million. If your combined pension benefits exceed this at retirement, the excess is taxed heavily.SSAS (Small Self-Administered Scheme)A pension scheme for company directors that gives you full control over investments, including property. More complex to set up but offers maximum flexibility.Tax ReliefThe government gives you back income tax on your pension contributions. If you pay 40% tax, a €100 pension contribution only costs you €60 out of pocket. The most valuable benefit of pension saving.Tax-Free Lump SumAt retirement, you can take up to 25% of your pension pot (capped at €200,000 tax-free, with the next €300,000 taxed at 20%). Most people take this immediately on retiring.Transfer ValueThe lump sum a defined benefit scheme will give you if you want to leave and move to a different pension arrangement. Accepting a transfer means giving up your guaranteed income.VestingThe point at which you gain full ownership of employer contributions. Some schemes require you to stay for 2+ years before employer contributions are fully yours. If you leave before vesting, you may lose some employer contributions.