The Irish Pensions Authority has launched a consultation on the introduction of in-scheme drawdown (ISD) as an additional option for defined contribution (DC) members at the point of retirement.

The authority believes ISD would offer “choice and simplification” for members and that trustees are well-placed to continue to manage retirement savings during the drawdown phase.

ISD is envisaged to be provided by authorised master trusts, but the authority noted that some large authorised single-employer schemes may also want to provide it.

As part of the proposal, DC members would be allowed to keep the balance of their fund in their pension scheme after taking a lump sum and drawing down from their pot in retirement. However, the authority has proposed that schemes will not be required to offer this option.

The proposed model would see ISD being offered as an additional option to eligible members; it would not replace any existing options. An ISD would not offer any guarantees by the scheme, and the balance of the fund would be a vested retirement benefit.

Schemes that choose to offer ISD would not be required to create a separate fund.

However, trustee obligations, where relevant, would remain until the member has no assets left in the scheme, as they would remain a member of the scheme until all of their money has been drawn down.

The Pensions Authority has also proposed that members opting for ISD could use the capital to take out an annuity or an approved retirement fund (ARF) at a later date if they wish.

The proposal follows the government’s Roadmap for Pensions Reform, which tasked the Interdepartmental Pensions Reform and Taxation Group (IDPRTG) to review the ARF option and the potential introduction of ISD.

The group concluded that legislative amendments should be progressed to enable ISD and to advance proposals to allow drawdown-only schemes.

Therefore, the authority is advancing proposals on ISD regulation to advise the Department of Social Protection.

The consultation is open to responses until 5 December 2025 and can be found here.

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