GOVERNMENT ANNOUNCES CHANGES TO PENSION DRAWDOWN REQUIREMENT
 
The Government has announced changes to the minimum draw down amount requirement on account-based pensions for the second half of 2008-09.

The move is a response to the downturn in global financial markets and the negative effect this has had on many pension members' account balances.

It is a requirement that minimum payments are made from a superannuation account-based pension at least annually. Minimum payments are determined taking into account the member's age and value of the account balance as at 1 July each year (or at commencement for members joining during the year).

The change means that members only have to draw down 50 per cent of their minimum drawdown amount over the 2008-09 financial year.

If you are receiving an Auswide pension, you may have already received 50% or more of your 2008-09 scheduled minimum pension payments. In that case, if you wish, you are able to suspend or alter your pension payments for the rest of this financial year.

For example, if your account balance was $100,000 as at 1 July 2008 and your annual minimum drawdown amount is 4 per cent, you would need to receive at least $4,000 for the 2008-09 financial year.

However, if you take advantage of the new legislation, you only need to receive $2,000 for the 2008-09 financial year, leaving more of your money in your account.

If you wish to advise Auswide of your intention to suspend or alter your scheduled pension payments for the remaining part of this financial year, please contact your adviser.

You may wish to check with Centrelink or your adviser regarding the effect on any Government entitlements.