Government eases pension rules
The Federal Government has moved to protect retirees with account-based pensions from crystallising their losses.
The Treasurer, Wayne Swan, and the Minister for Superannuation and Corporate Law, Senator Nick Sherry, announced today that the Government was suspending the requirement to pay out minimum payments from superannuation account-based pensions in the second half of 2009 amid concerns that the requirement will force retirees to realise their investment losses in a market downturn.
"The Government realises that the significant downturn in global financial markets has had a negative effect on retiree's superannuation capital in account-based pensions," Swan said.
There were also concerns that the minimum payment amount was based on last year's high asset values.
Sherry said the Government will reduce the minimum payment amount by 50 per cent for the financial year, meaning retirees who have taken half of their current minimum payment will not be required to make another payment until the end of the 2009 financial year.
The suspension will apply to account-based and allocated annuities and pensions, account-based and allocated pensions from retirement savings accounts, and market-linked annuities and pensions.
The Government will investigate a more long-term solution after the future tax system review, Swan said.
AUTHOR
Benjamin Levy
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