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Drawdown relief for account-based superannuation pensions has been extended for the 2010-11 financial year.
Retirees will be afforded a 50 per cent reduction in the minimum drawdown amounts for account-based, allocated and market-linked pensions for the 2010-11 financial year.
A joint statement from Treasurer and Deputy Prime Minister Wayne Swan and Assistant Treasurer Nick Sherry said the extension to the provision would give retirees more time to recoup capital losses on pension portfolios.
“While equity markets have recovered to an extent over the past year, they remain well below the levels reached prior to the onset of the global financial crisis.”
Swan and Sherry acknowledged that many self-funded retirees had suffered significant capital losses during the financial crisis, and that the impact was ongoing.
The drawdown relief was introduced two years ago to reduce the need for retirees to sell assets at a loss in order to meet the minimum payment requirement.
Minimum payments must be made from a superannuation account-based pension at least annually, with minimum payments determined by the age of the client and the value of the account balance at 1 July each year.
The Small Independent Superannuation Funds Association (SISFA) has called for the relief to be extended permanently.
SISFA chair Michael Lorimer said a return to previous drawdown levels would see many “marginally independent” self-funded retirees pushed on to the age pension system.
“Our members work with self-funded retirees everyday and see the pressure that they are under with the fall in the capital base of their superannuation after the global financial crisis,” Lorimer said.
“SISFA calls on the Government to make these lower drawdown levels permanent. A ‘temporary’ respite in drawdown levels will not be enough to allow many 65-80 year olds to fund the lifestyle that they had planned when they retired.”
