Reduction in minimum pension drawdown
The Federal Government recently announced an extension of the temporary reduction in superannuation minimum drawdown rates for a further year to 30 June 2022.
As part of the response to the coronavirus pandemic, the Government reduced the superannuation minimum drawdown rates by 50 per cent for the 2019-20 and 2020-21 income years, which was scheduled to end on 30 June 2021.
The recent announcement extends that reduction to the 2021-22 income year. For many retirees, the significant losses in financial markets as a result of the COVID-19 crisis are still having a negative effect on the account balance of their superannuation pension.
This measure will provide retirees with some flexibility in their retirement, and help in preserving their capital, should their circumstances permit.
We understand from the Government’s announcement that the extension will apply to account based pensions (including transition to retirement pensions) and market linked pensions, in accordance with the current temporary rules. Just as is the case currently, there is no reduction in the maximum draw down rates for transition to retirement pensions and market linked pensions.
The revised rates for applicable pensions in 2021/2022 are now:
|Age of Member
|65 – 74
|75 – 79
|80 – 84
|85 – 89
|90 – 94
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