The freedoms provided to proprietary directors and the self-employed regarding their pension funds last year will be extended to those in occupational pension schemes who have made additional voluntary contributions (AVCs) in this year's Finance Bill.

Those with AVCs will be able to use them to invest in approved retirement funds, the various alternative options that have come on the market since the compulsory purchase of annuities was abolished for the self-employed.

The Minister for Finance, Mr McCreevy, said he took the view that those who decided to make voluntary, additional contributions should be allowed the same flexibility as the self-employed.

However, the Society of Actuaries (SAI) expressed concern about the lack of consumer protection under the new regime. It is also worried about the minimum income threshold a pensioner must have before he can invest in an approved retirement fund . But Coyle Hamilton said the Bill did not go far enough. "The Minister could have gone further - he could have extended approved retirement funds to all occupational pension schemes and in all circumstances," its legal director, Mr Kevin Finucane said.

The Finance Bill also reduces the qualifying conditions for proprietary directors to avail of alternative pension provision options. Previously, they must have held at least 20 per cent of the share capital of the company to avoid having to purchase an annuity but this has now been reduced to 5 per cent.

The taxation of approved retirement funds is also being changed so that tax, at the marginal rate, will only be applied on withdrawals of capital or income from the fund. Mr McCreevy has also amended the requirements on who can offer approved retirement funds to include firms authorised by the Central Bank under the Investment Intermediaries Act. The Bill also allows EU-based fund managers, who qualify under the European Investment Services Directive, to provide such products.