In all of the fuss over reduced tax-free lump sums and lower earnings limits, one of the few positive measures got lost in the mix. In keeping with a commitment made in the National Pensions Framework published in March, the minister for finance announced that the Finance Bill would include a provision to extend flexible options on retirement to members of defined benefit contribution schemes. This is good news for members of defined contribution schemes who, because they were left with a pension based on whatever the value of their fund was at retirement, were wholly at the mercies of the market. Under the previous rules, when a person in a defined contribution scheme retired, they were required to purchase an annuity – a contract with a life insurance company which guarantees you a regular income for life – using the remainder of the fund after the tax-free lump sum was drawn down. This meant that anyone who retired around the time that the stock and property markets crashed, for instance, lost hand over fist. Annuities also present problems because unless you opt for one which escalates over time, the set income falls behind inflation, and if you want to provide a part-pension for your dependents after death, your annual income will be lower, otherwise your annuity dies with you. The new rules mean that, while it is still possible to buy an annuity, defined contribution members will now, subject to certain conditions, be able to invest in an Approved Retirement Fund (ARF). The advantage of an ARF is that it allows you to continue to invest and grow your fund and you have a degree of control over where your money goes. You can make regular withdrawals from it and any money left in the fund after your death becomes part of your estate. You also have the option to use it to buy an annuity at a later date when terms might be more favourable.