A ring fenced amount in a vested PRSA automatically becomes non-ring fenced when the PRSA holder starts to receive pension income payable for his or her lifetime of at least €12,700 per annum. When does this occur?

• A. When the ring-fenced balance first exceeds €63,500
• B. When the PRSA holder begins to receive lifetime pension of at least €12,700 per year
• C. When the holder reaches age 70
• D. Five years after the PRSA vested

Answer: (B)

The key idea is that ring-fenced funds are protected until they are used to secure a lifetime income. In a vested PRSA, the ring-fenced amount becomes non-ring-fenced the moment you start receiving a lifetime pension of at least €12,700 per year. That threshold marks the point at which the funds are actually being used to provide ongoing income, so the ring-fence is released. The other options don’t set the trigger for releasing the ring-fence: it isn’t about the ring-fenced balance reaching a certain level, not about age, and not about a fixed period after vesting.