Reduction in minimum pension payments extended for the 2009-2010 year
The government has extended the halving of superannuation pension payments for the 2010 year to provide temporary cash flow relief to superannuation funds.
Minimum payment rules apply for superannuation pensions paid as either:
- Account based pension (ABP) including Transition to Retirement Income Streams (TRIS)
- Allocated pension (AP) and
- Market linked pension (MLP).
Halving of minimum pension payments for the 2010 year applies to ABP which commence after 1 July 2009.
The minimum payment is based on the recipient age and value of their account balance on either:
- 1 July of each year or
- Pension commencement date if commenced on a day other than 1 July of the income year.
Where an ABP commences on a day other than 1 July, the minimum annual pension withdrawal is pro-rated over the period from commencement of the pension income stream to 30 June of the income year.
Where an ABP commences on 1 June of an income year, there is no requirement to pay a pension by 30 June.
The minimum withdrawal values are:
| Age | Standard Minimum Withdrawal |
Minimum Withdrawal 2009-2010 |
| Under 65 | 4% | 2% |
| 65-74 | 5% | 2.5% |
| 75-79 | 6% | 3% |
| 80-84 | 7% | 3.5% |
| 85-89 | 9% | 4.5% |
| 90-94 | 11% | 5.5% |
| 95 and above | 14% | 7% |
There is no maximum withdrawal percentage limit for an account-based pension.
TRIS based pension arrangements are subject to a maximum payment limit of 10% per annum. This maximum limit still stands despite the halving of ABP withdrawals.
Recipients of an ABP income stream greater than the minimum withdrawal amount may only return the excess component to the Fund as a contribution (subject to the terms of the superannuation fund deed acceptance rules).
