SMSFs warned to ensure minimum pension paid before 30 June

The SMSF Association has warned SMSFs with pensions to ensure that the minimum pension payments have been met by 30 June.

SMSF Association CEO John Maroney said, given all the changes around 30 June, it would be understandable if SMSF members overlooked the compliance obligations for pension payments.

“Although it’s imperative SMSF members are across all the changes, we would urge them not to overlook withdrawing their minimum pension amount for the 2016-17 financial year,” he said.

“Alternatively, if they are in the transition-to-retirement phase they must take care not to exceed the maximum payment. If members are in any doubt they should get specialist advice.” Read more...

Almost half of super pensions only drawn down at minimum levels

superannuation pensions, drawn down minimum levelsAlmost half of people with superannuation pensions are only drawing down at the minimum levels, according to research by the Actuaries Institute and CSIRO, but a significant portion of people are on track to exhaust their superannuation balances early.

49.97% of people with superannuation pensions in non-industry super funds are only drawing down on their pensions at the minimum level. 49.00% of people in industry super funds with pensions are drawing down at the minimum level.

“Contrary to some views that retirees quickly run down their super balances and then rely wholly on the Age Pension, the reality is that at least half of the pensioners take a very financially conservative approach in retirement,” said Anthony Asher, convenor of the Actuaries Institute Retirement Income Working Group. Read more...

Review leaves super pension drawdowns at current levels

retirement income streams review, superannuation pension minimum drawdownThe Government has released the final report of the retirement income streams review, which recommends no changes to the minimum pension drawdowns.

A review of retirement income streams was a 2013 election promise, with a discussion paper released in July 2014. The final report comes only days from the likely start of the next election campaign.

“This delivers on our commitments to review the minimum drawdown rules for account-based pensions and regulatory barriers to the development of appropriate income stream products in the Australian market,” said Minister for Small Business and Assistant Treasurer Kelly O’Dwyer. Read more...

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. Read more...

Bring back pension drawdown relief, says Taxpayers Australia

superannuation, account based pension, minimum drawdown, drawdown relief, Taxpayers AustraliaTaxpayers Australia is calling for the reintroduction of pension drawdown relief, as low interest rates are forcing SMSFs to restructure their investments to fund pension payments

The organisation said the minimum drawdown requirements on account based pensions are “too high in an environment where deposit interest rates offered by financial institutions are giving SMSF trustees minimal returns”.

“When in pension mode, the drawdown amount can cause unnecessary restructuring of the SMSF investment strategy to ensure sufficient cash to make these payments.” Read more...

SMSF missing the minimum pension payment amount?

SMSF minimum pension paymentSMSFs which are paying pensions have to meet the minimum pension payment requirements, or else both the super fund and the pension recipient can face higher taxes. Some pensions also have to satisfy a maximum pension payment requirement.

Government considering super pension drawdown changes

superannuation pension minimum drawdownDespite recent comments by other senior members of the Government, changes may still be made to the minimum superannuation pension drawdown amounts,  according to the Assistant Treasurer Josh Frydenberg. The Government will also take superannuation changes resulting from the Tax White Paper process to the next election,

Government abandons changing super pension drawdowns

Government, superannuation, minimum pension drawdown

Update: Assistant Treasurer Josh Frydenberg now says the Government is considering changing the superannuation drawdown rules, without increasing the rates.

Despite promising to review the appropriateness of the minimum superannuation pension drawdowns, the government appears to now be abandoning any changes.

The Australian Financial Review is reporting that Social Services Minister Scott Morrison said the government has no intention of making any changes to pension drawdowns.

SMSF borrowing on ATO’s radar, says Assistant Commissioner

SMSF borrowing, ATO Assistant Commissioner for superannuation, minimum pension paymentSMSF borrowings which contravene the SIS Act and regulations are on the ATO’s radar.

ATO Assistant Commissioner for superannuation, Matthew Bambrick, told the Tax Institute Annual Superannuation Intensive Conference that the ATO is “concerned that some organisations are promoting arrangements where SMSF assets provide members with a current-day benefit.”