On 18 February 2009, the Government announced relief from the minimum pension payment requirements for 2008/09. This is in recognition of the decline in account balances that many retirees have experienced due to market conditions.
What is the change?
The minimum payment requirement under the terms of the existing pension will be halved for the year ended 30 June 2009. For example, if the minimum payment requirement for the 2008/09 year was $10,000, only a $5,000 payment will be required for this financial year.
Which pensions / income streams are affected?
The change applies to account based income streams, such as:
- Account-based pensions and annuities (those commenced from 1 July 2007)
- Allocated pensions and annuities (those commenced pre-1 July 2007)
- Term allocated pensions
- Transition to retirement income streams
The relief does not apply to Defined Benefit income streams.
What are the impacts for our customers?
If you have already taken at least the new revised minimum pension payment, you will no longer be required to draw anything further from your pension account. For example, if the new revised minimum pension is $5,000 and at least this amount has already been paid from your account, no further drawdown is required.
If you have deferred payments until the end of the year, only the revised minimum will be required by 30 June 2009.