Government Provides Relief for Retirees
On the 18th of February, Treasurer Wayne Swan and Senator Nick Sherry, Minister for Superannuation and Corporate Law, announced a 50% reduction in the minimum drawdown required for account-based pensions.
This move by the Government was prompted by the significant downturn in financial markets and the growing concern that retirees will need to sell investment assets and realise losses.
This applies to account-based, allocated and term allocated pensions and annuities and is for the 2008/09 year only. It effectively means that people drawing these types of pensions currently can reduce them to less than the statutory minimums that start at 4% of the account balance. It is important to note that the percentage applies to the balance as at 1st July 2008, not the current balance.
This is a positive move, which will allow pension recipients to preserve their capital in these volatile times.
POSTED: 20-Feb-2009