The Federal Government has temporarily reduced the aged-based minimum drawdown rates on Account-Based Pension Plans by 50%.
The aim of the measure is to allow members to better manage their pension payments during the current period of market volatility due to the COVID-19 pandemic.
This change will benefit members by reducing the need to sell investment assets during this period to fund minimum drawdown requirements.
The new temporary aged-based minimum drawdown limits are shown below:
|Age||Current minimum drawdown percentage of your account balance||New temporary minimum drawdown percentage of your account balance|
|Under 65 years||4%||2%|
|95 years and over||14%||7%|
For the 2020/21 financial year, if you have elected to receive the minimum, your payments will be set at the new minimum rate.
You have two options to change your limit:
Reducing your pension payments will help you to retain more investment assets in your account. However, it will reduce your overall regular income.
Before you reduce your pension amount, you should be confident that you will have enough money from your pension and any other sources of income to live on and meet your regular financial obligations.
If you are unsure about reducing your pension payments, you can request a phone appointment with one of our financial planners.