The 50% reduction in minimum pension payments for the 2008/09 year has now been legislated.
The Superannuation Industry (Supervision) Regulations 2009 (SIS Regulations) were amended on 13 March 2009 to provide for a 50% reduction in the minimum drawdown amount for many pensions in the 2009 financial year.
This amendment applies to account based pensions, allocated pensions and market linked pensions, including where these pensions started as a transition to retirement type of pension.
However, it does not apply to flexi pensions, complying fixed term pensions or complying life time pensions.
Despite these amendments to the SIS Regulations, you will need to check the trust deed for your superannuation fund to ensure it permits the superannuation trustee to make reduced minimum payments.
If you have a Cooper Grace Ward self managed superannuation fund trust deed, you will be able to take advantage of these amendments.
However, some superannuation trust deeds specify the minimum payment percentages. These deeds must be varied to permit the superannuation trustee to pay a reduced amount.
To take advantage of the relief, it is also important to make sure the pension documentation sets the minimum drawdown amount by reference to the minimum amount specified in the SIS Regulations, and not by reciting the minimum percentages.
These amendments do not alter the maximum drawdown amount permitted by the SIS Regulations.
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.
