Reduction in Pension amounts for 2008/09

Dated: May 2009

In summary, the Government has effectively reduced the minimum pension drawdown required for the 2008/09 year by 50% for account-based pensions.

The Treasurer Wayne Swann and Senator Nick Sherry, Minister for Superannuation and Corporate Law, made this announcement in response to concerns that meeting the minimum drawdown amount determined using the normal rules may mean having to sell investment assets and realise losses in a significantly depressed market.

The reduction is achieved by the Government suspending the minimum drawdown requirements for the second half of the financial year.

This temporary relief addresses concerns that the minimum drawdown requirement is based on asset values as at 30 June 2008, when equity values were higher.

If you have already drawn down half the current minimum payment for 2008/09, then no further payment will be required until the 2009/10 financial year.

The temporary suspension of the minimum payment requirement applies to:

• Account based annuities and pensions (payable since 1 July 2007)
• Allocated annuities and pensions
• Market linked annuities and pensions.