Minimum pension relief for self-funded retirees

In 2008-09, 2009-10 and 2010-11, the superannuation regulations were amended to reduce the minimum annual pension payment by 50%.

In 2011-12, this relief has been extended, with the minimum payment for account based pensions reduced by 25%. Due to the continuing volatility in equity markets, the 25% reduction has been extended for a further year. The extension of this measure to the 2012-13 financial year will assist retirees to recoup capital losses as equity markets recover over time.

Example

A self-funded retiree who is 60 years old is required during a year to draw a minimum annual pension payment calculated as 4% of their account balance at 1 July (or of the account balance as at the commencement date of the pension, if it commenced during that year). Under the regulations, this percentage is reduced to 3% for 2011-12 and 2012-13.

For more information on super income streams, refer to:

• Paying benefits
• Changes to pension standards for self managed super funds
• Stopping and starting a superannuation income stream.