Halving of Minimum Pension Draw Down Rates
7 June 2021
An Extension of the Temporary Reduction in Superannuation Minimum Drawdown Rates
In an effort to assist retirees during the coronavirus pandemic, the Government introduced a temporary 50% reduction in superannuation minimum drawdown rates. This reduction was set to end this financial year but has been extended to 30 June 2022 to include the 2021-22 financial year.
Minimum annual payment requirements, calculated on 1 July each year, will be affected by the extension.
The most commonly used pensions that qualify for reductions are account-based pensions (including transition to retirement income streams).
Rates are as follows:
|65 - 74||2.5%|
|75 - 79||3%|
|80 - 84||3.5%|
|85 - 8||4.5%|
|90 - 94||5.5%|
Different rates are used for other types of pensions like market-linked pensions and annuities.
The media release from the Prime Minister stated "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" and that the extension to the reduction "continues to make life easier for our retirees by giving them more flexibility and choice in their retirement".
If you have any questions or would like more information please contact your local Boyce representative.