Government to respond to income streams review ‘very shortly’

Government respond shortly to review of retirement income streams, superannuation pensionsThe Government will soon respond to a review of retirement income streams, including possible changes to minimum drawdown levels.

Assistant Treasurer, and Minister for Small Business, Kelly O’Dwyer said the Government would respond to the review “very shortly and will have more to announce on that when we do.”

In July 2014 the Treasury started a consultation process to review the regulations on retirement income streams, including

  • “the regulatory barriers restricting the availability of relevant and appropriate income stream products in the Australian market; and”
  • “the minimum payment amounts for account-based pensions, to assess their appropriateness in light of current financial market conditions.”

One issue the Treasury was looking at was changes to the minimum drawdown amounts for superannuation pensions. An option raised was to adjust the minimum pension drawdowns based on market conditions, though this received very little support in submissions. However it appears that changes to the current drawdown schedule were still being considered.

The discussion paper also asked about the impediments to developing new retirement income products, particularly around longevity and investment risk.

“We certainly know that there haven’t been the suite of options available to people to actually take an income stream that would otherwise be available because of some of the regulations that have been put in place that have thwarted that,” said Kelly O’Dwyer last week.

The income stream review followed from a pre-election promise. “As a priority, the Coalition will review the regulatory barriers currently restricting the availability of relevant and appropriate income stream products in the Australian market,” the Coalition promised prior to the last Federal Election.

With increasing speculation of an early election, it is possible the Government is trying to meet this election commitment before going back to the polls.

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