The Government has released a discussion paper which raises the option of changes to the minimum annual pension payments and the introduction of new types of income streams to improve incomes in retirement.
With the release of the discussion paper, Review of Retirement Income Stream Regulation, Acting Assistant Treasurer Mathias Cormann says the Government is delivering on the election commitment to “review regulatory barriers restricting the availability of retirement income stream products”. At a time that “Australians are looking for more options to better manage their retirement income” Cormann says that the Government wants to “encourage greater product innovation” in retirement income streams.
The Financial System Inquiry panel also seems to be thinking in similar directions, given the following observation was made in the interim report:
“There are regulatory and other policy impediments to developing income products with risk management features that could benefit retirees.”
The focus of the reforms the Government is considering seems to be changes to the minimum annual pension payments the introduction of Deferred Lifetime Annuities.
Minimum Annual Pension Payments
One option to raised in the discussion paper is the change the minimum annual pension payment requirements of account-based pensions – the currently 4%-14% minimum that needs to be withdrawn each year in order to meet the conditions of a pension.
Read More »Government considers ways to improve income streams