Drawdown relief phase-out begins
The Federal Government has begun the phasing out of drawdown relief on account-based pensions, delivering on its Budget promise to reduce the minimum payment amount by 25 per cent.
Under the phasing-out program outlined by the Government, minimum payment amounts will return to normal from 2012-13.
The Assistant Treasurer and Minister for Financial Services Bill Shorten (pictured) said the regulatory changes represented a phasing-out of the drawdown relief which has applied over the past three years, based on a halving of the minimum payment amounts.
“The provision of drawdown relief for the past three years has reduced the need for account-based pension holders to sell assets at a loss in order to meet the minimum payment requirement,” he said. “This new relief will assist around 120,000 self-funded retirees recoup capital losses as markets recover.”
The Minister claimed the more limited drawdown relief for the new financial year recognised the rise in equity markets that had occurred since the global financial crisis with the minimum payment amounts reverting to their normal levels from 2012-13.
AUTHOR
Mike Taylor
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