Distribution Calculations 2025

Slide 1 

Hello and welcome to this webinar session for Standard Life’s Distribution Calculations pay run for 2025. My name is Sarah Murray and I’m a payroll specialist here at Standard Life.  The Customer Payroll team are responsible for looking after our clients’ Distribution liability for 2025 and ensuring that all taxes are correctly submitted to the Revenue.  

This session is a quick overview to tell you what we do and how it all works. We all are heading into the busy period for ARF/Vested PRSA clients, and so we want to use this opportunity to remind everyone of the key dates and details. Overall this shouldn’t take longer than 15 minutes and I hope that you take some useful information from it.  

Moving on to our first slide. 

Slide 2 

So just to go through the topics that we will cover here today. Firstly, I’ll give a general overview of what Distribution means and the tax liability that the Revenue will be looking for.   

There will be information about the Nominee QFM process (that’s Qualifying Fund Manager) and appointing one to look after a client’s Distribution liability. There will be a little information on the “impute tax only” option, whereby a client doesn’t take a withdrawal, but does pay the tax due.  

I’ll also go through the important dates to remember when it comes to Standard Life’s December pay runs, keeping in mind payments reaching clients in time for Christmas. 

We will cover setting up a regular withdrawal and setting up bank details on your client’s policy. A withdrawal paid directly into your client’s bank account will ensure that payment reaches them before Christmas. We would encourage that clients who are currently paid by cheque move to Bank Transfer payment.  Postal services in December are always that bit busier, so moving from cheque to bank transfer will avoid any delays in payments reaching clients. 

Our last topics will be some information on how a client can allocate cut offs and credits to their Standard Life income before their first withdrawal, how we apply this information in calculating their payments and a reminder of changes to PRSI in 2025.  

Moving on to the next slide. 

Slide 3 

So, a general overview of our Distribution Calculations. You may be aware of these already but a refresher can always be good. Annually a client must withdraw a certain percentage from their ARF and/or Vested PRSA fund. The withdrawal is based on the fund value of all ARF/Vested PRSA polices as at 30th November, and a percentage based on the client’s age or the client’s fund value. To comply with this Revenue obligation, we run a standalone pay run every December. Some clients have a regular monthly or quarterly or half-yearly or yearly withdrawal set up, and some clients take ad hoc withdrawals from their ARF/Vested PRSA policy. Withdrawals taken through-out the tax year are included in the calculation of the value liable to tax. 

For clients aged between 60 and 70, and if 60 it must be for the full year, then 4% of their fund value is liable for tax. If the client is aged over 70, again aged 70 for the full year, then 5% of their fund value is liable for tax. When I say they must be 60 or 70 for the full year, it effectively means that a person born on the 1st January and is 60 this year WILL be liable for Distribution as they are 60 for the full year, but a person born on the 2nd January and is 60 this year, WILL NOT be liable for Distribution as they aren’t 60 for the full year. For any clients that have ARF/Vested PRSA assets worth over €2million, 6% of their fund value is liable to tax for Distribution, this is also where Nominee QFMs come into play, and I’ll talk more about that later. If a client has multiple ARF/Vested PRSA policies with us, their fund value, for the purposes of calculating the 4, 5 or 6% liability to tax, is their total Standard Life ARF and Vested PRSA portfolio. Any Distribution due will be deducted proportionally across their policies. The deduction is divided based on the percentage of the total portfolio value each policy contains.  

Moving on to the next slide. 

Slide 4 

The Nominee QFM process. As we said before, if a client has ARF/Vested PRSA funds with a portfolio of over €2million, then a QFM must be nominated to manage their entire portfolio and ensure that this 6% liability is met. For Standard Life - if you want Standard Life to be a Nominee QFM for a client - then you must apply to us. We require a written request if the customer wants us to be their Nominee QFM. Then, if approved, we will be in contact with you to get the relevant information. I believe some communications have already begun for clients where we are already the Nominee QFM.  

We will also contact you if another company has been nominated as QFM. In these cases, we will provide a valuation of the client’s Standard Life portfolio as at 30th November 2025 which is the important set valuation date, and also a statement of all withdrawals for 2025, so that the other office can calculate the Distribution liability in total. You can contact us at arf_payroll@standardlife.ie if you want to ensure that we have the correct information regarding the Nominee QFM status of a client, or indeed if you do want to apply to us to request that Standard Life be the Nominee QFM.  

Moving on to the next side. 

Slide 5 

Next is what we call the “impute tax only” option. It’s just a little information because some clients do request this each year, and we just want to make sure that they are fully aware of what it means, and the potential tax consequences. There can be a double taxation effect if this is requested. So, what happens if this is requested?  We will consider 4, 5 or 6% of the client’s fund as applicable, and whatever tax would be due on that amount, we will submit those taxes to the Revenue, and that’s all we will pay, just the tax. The net amount, instead of going to the client, stays in the policy.  

So, to the double taxation effect. Say the client subsequently requests a surrender of their policy, they will be taxed AGAIN on the amount in the fund that they would have originally received at the time of imputed distribution, remember they didn’t take the net pay at that time. I hope that makes sense, it’s important that you are aware of this double taxation effect. We do require a written instruction from the client if they do wish to avail of this option. Some clients that have chosen this option in the past maybe haven’t fully understood the impact. It is an option that should be considered very carefully due to the potential double taxation effect.  

Moving on to the next slide. 

Slide 6 

So, the important dates to note around Distribution. The first date is Friday 28th November. This is the deadline date for all ad-hoc withdrawal instructions for 2025. 

So if a client has a particular request or instruction for payment that they want to send into us, if that’s with us by the 28th November it means we WILL be able to action it in December this year, as always this would be assuming all the necessary information is received. We seek these instructions as early as you can get them to us, with the 28th November as the deadline.  

We have what we call our “main run”, that’s our main monthly payroll which goes out BEFORE our Distribution liability pay run. The main run for regular withdrawals is the 12th December, so payments leave our bank account on 12th December and should arrive in client bank accounts shortly after that.  

This run pays out any client’s “Regular” incomes which are already set up, along with any ad hoc withdrawals processed. Once we go past the 12th December, we start our Distribution pay run, meaning that for any Distribution calculations that produce a liability, payment will be issued from our account on the 22nd December and again will arrive in client bank accounts shortly after that. 

We will work to avoid delays in cheque payments reaching clients, however, where possible we are encouraging you to ask your clients currently on cheque payment, to provide their bank details to facilitate a bank transfer, it is safer and faster, and it will avoid delays in payments reaching clients. 

That covers the key dates to remember, so Friday 28th November in particular, if you can get any specific withdrawal instructions in to us by that date it will ensure that the client receives payment in time for Christmas.  

Moving on to the next slide 

Slide 7 

Here we have some information on setting up a regular withdrawal on a client’s ARF/Vested PRSA policy .  A regular withdrawal can be set up to be paid monthly, quarterly, half-yearly or yearly.  A client can also take ad hoc withdrawals throughout the year. If a client of yours would like to set up a regular withdrawal, please contact us at arf_payroll@standardlife.ie and we’ll let you know the requirements. All withdrawals taken throughout the tax year are included in the calculation of a client’s Distribution liability in December. 

Moving on to the next slide. 

Slide 8 

Here we have some points on setting up bank details on your client’s policy. As I said earlier, clients can get their money faster if they opt to receive their payments by bank transfer. To set up a bank transfer payment, you simply forward a copy of a recent bank statement and we’ll add the bank details to the client’s policy. By recent, we mean a statement within the last 6 months. Besides being paid faster, bank transfers are a more secure payment method and the client will receive the payment before Christmas. Cheque payments are likely to be slower with the usual Christmas postal delays…. 

Moving on to the next slide. 

Slide 9 

Just a little information for new clients if they wish to assign cut offs or credits to their Standard Life income in advance of their first withdrawal. As their pension provider, we must first register their pension with the Revenue and then the client can complete the allocation of cut offs and credits to their Standard Life income. An email can be sent to us at arf_payroll@standardlife.ie requesting that we register a client on our payroll. Once the registration is complete the client can then, if they wish, change their tax basis and allocation of cut offs and credits to their Standard Life income. The Revenue will then issue Standard Life with a RPN containing this information. RPN stands for Revenue Payroll Notification and it is the employer’s or pension provider’s version of a client’s Tax Credit Certificate.   

If the client has any queries regarding their tax situation, they can contact the Revenue’s Jobs and Pensions Helpline at the number shown on the slide. It is important to note that a client must be already registered for PAYE purposes before a RPN can be issued to Standard Life.  

Moving on to the next slide. 

Slide 10 

Here’s a reminder of the PAYE Modernisation regime introduced by the Revenue in January 2019.  Clients now look after their taxes online on www.revenue.ie. There they’ll find the myAccount page, where they can review the tax credit allocation to their Standard Life income. The client can allocate cut offs and credits using our tax registration number for ARF/Vested PRSA payments, 3586780HH, and that number is shown on the slide.  

We use a client’s latest RPN to tax their payment. In line with the Revenue’s guidelines, we are obliged to operate the latest RPN available.  As part of our payroll process, we download the RPNs via the Revenue’s website when running our payroll, and again we use this to calculate the client’s tax liability. So when we submit our payroll to the Revenue, that’s what we use, the latest RPN available from the Revenue. On the day we pay a client, their payment can be viewed on the Revenue’s myAccount page. 

Payments made to clients are submitted to the Revenue in real time, through a Payroll Submission. We are obliged to send the Payroll Submission to the Revenue on or before pay day. That means on the day we pay our clients, the Revenue will already have received that information.   

Any payments that don’t go through by the end of 2025, will be paid in January 2026. So again, to remind you that the deadline date for payment instruction is Friday 28th November. Payment instructions received after Friday 28th November will be made in January 2026. There is no option to backdate payments to the 2025 payroll for tax purposes.  

Moving on to the next slide. 

Slide 11 

And our last topic. An ARF or Vested PRSA withdrawal is treated as investment income and is subject to PRSI Class S. 

Clients aged between 66 and 70 and born after 1st January 1958 will continue to be liable for PRSI Class S until such time as they are awarded the State Pension (Contributory) or reach age 70 whichever is earliest. Once a client is awarded the State Pension (Contributory), the Revenue will notify us through their RPN and we’ll update their PRSI to Class M, which is a nil contribution.  

The Department of Social Protection changed the Class S PRSI rate from 4.1% to 4.2% on 1st October 2025.     

If a client has any queries regarding their PRSI contributions, they can contact the Department of Social Protection at the number shown on the slide.  

Moving on to the next slide. 

Slide 12 

So that concludes this session. If you have any questions, please do email us @ arf_payroll@standardlife.ie . 

The arf_payroll@standardlife.ie email address is also where you can send scanned copies of your client’s signed payment instructions, bank details, Nominee QFM information, and anything further that we’ve discussed here today.  

We have created a two page document which summarises the details we went through here today, and you’ll find that on our adviser site. 

And to move on to our final slide. 

Slide 13 

Thank you for joining me today, I hope you enjoyed it and found the information useful. So, thanks again and here’s to a successful Distribution 2025!