Super Relief...

AsxBroker · 19th Feb, 2009

Retirees granted super relief
Mark Davis Political Correspondent
February 19, 2009

UP TO 400,000 self-funded retirees whose nest eggs have been slashed by the turmoil on financial markets will finally gain some relief after the Federal Government yesterday relaxed its rules on superannuation investments.

The Treasurer, Wayne Swan, and the Minister for Superannuation, Nick Sherry, announced the Government would temporarily suspend requirements for people on superannuation pensions to make a minimum annual withdrawal from their accounts.

Under this requirement, retirees have been forced to take payments of between 4 and 14 per cent of their account balance each year.

The rule is designed to ensure retirees draw down their capital but in the current environment pensioners have been anxious it would force them to incur significant losses by selling investments to make the minimum payments.

Senator Sherry said the Government recognised the downturn had had a significant negative effect on retirees' superannuation capital.

"In response to these legitimate concerns, the Government will suspend the minimum drawdown requirement for account-based pensions for the second half of 2008-09," he said. "This will occur through a 50 per cent reduction in the minimum payment amount for 2008-09."

Senator Sherry said people who had already taken half their current minimum payment for 2008-09 would not be required to take a further payment until the end of 2009-10.

National Seniors Australia welcomed the move but called for minimum withdrawal requirements on allocated pensions to be abolished permanently.

"Retirees are reporting the value of their super savings being reduced up to 50 per cent, but they still have to take out as a pension a fixed percentage of what their savings were before the economy came crashing down," said the National Seniors policy adviser, Paul Versteege.
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Retirees granted super relief | smh.com.au

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