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Otto & Partners - July 2010 |
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Government extends 50% reduction to minimum Pension Payments
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Minimum Pension Payment reduced by 50% for 2010/11
The Federal Government has announced today, 30 June 2010, that the 50% reduction to the minimum pension payment requirement for account based pensions will continue for the 2010/11 income year.
In a joint media release by the Treasurer, Assistant Treasurer and Minister for Financial Services, Superannuation and Corporate Law the Federal Government said:
"Drawdown relief over the past two years has helped retirees with account based pensions by reducing the need to sell assets at a loss in order to meet the minimum payment requirement.
Extending the drawdown relief for a further year will help retirees to recoup capital losses on their pension portfolios as equity markets recover over time."
Please note that the 50% reduction only applies to pensions which are account based, that is, Account Based Pensions, Allocated Pensions and Market Linked Pensions (also known as “Term Allocated Pensions” ). The 50% reduction does not apply where the pension is a defined benefit pension, eg Life time complying pension; fixed term pension – for defined benefit pensions the actuarially determined pension amount must be paid.
Consequently, the minimum Account Based Pension % for 2010/11 will be:
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Minimum annual pension payment as a % of account balance
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Under 65
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2%
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65 - 74
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2.5%
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75 - 79
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3%
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80 - 84
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3.5%
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85 - 89
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4.5%
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90 - 94
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5.5%
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95 and over
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7%
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The Federal Government also advised in the joint media release that the Superannuation Industry (Supervision) Regulations will require amendment and such required amendments will be made in the new financial year.
For the full text of the Federal Government's joint media release please click here
Happy End of Financial Year to All!
Disclaimer:
Any advice in this publication does not take account of your personal circumstances. Before
relying on it to make a decision, you should speak to Craig Otto & Associates Pty Ltd. Although
this information was obtained from sources considered to be reliable, Craig Otto & Associates
Pty Ltd does not guarantee it is accurate or complete. The information in this publication is
current as at the date of publishing and may change over time.
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