Yesterday the Government announced relief from the minimum draw
down percentages for account based pensions.
For the 2009 financial year there will be a 50% reduction in the
minimum payment pensioners must take from their account. This means
that for people who have already taken half of the current minimum
payment, a further payment is not required until the 2010 financial
The relief addresses concerns that minimum draw down
requirements were set based on asset values at 1 July 2008 and
because of factors outside the control of trustees and members, the
value of many funds has decreased (sometimes substantially) since
then, making it difficult for some funds to find the cash for
pension payments. This will mean that many people can avoid having
to sell investment assets and realise loses in the current
Some funds will not be able to take advantage of this relief.
You should ensure that the trust deed for the fund allows the
reduced draw down, as some trust deeds recite and entrench the
minimum payment percentages set in the Superannuation Industry
(Supervision) Regulations and will require a deed variation to
allow a lower payment (the Cooper Grace Ward deed will allow the
reduction). Also, clients should check pension documents to see if
they set the minimum drawdown as a percentage or refer to the
minimum required by the SIS Regulations.
The announcement does not address reducing the
maximum draw down for transition to retirement
pensions, so we expect that remains unchanged.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Treasurer Scott Morrison recently announced changes to a number of 2016 Budget superannuation contribution measures.
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