For investors with account-based pensions

The government has announced it will extend the 50% reduction to the minimum pension payment requirement for the 2010/2011 financial year. This means that the minimum payment amounts for 2010/2011 will be as follows:

Your age on 1 July	Standard Minimum Pension	Reduced Minimum Pension 2010/11
Under 65	4.0%	2.0%
65-74	5.0%	2.5%
75-79	6.0%	3.0%
80-84	7.0%	3.5%
85-89	9.0%	4.5%
90-94	11.0%	5.5%
95+	14.0%	7.0%

The extension is further help self-funded retirees to recoup capital losses on their pension portfolios as equity markets recover over time and want to minimise pension drawdowns.

For investors with Term Allocated Pensions:

Annual payments from term allocated pensions are based on payment factors determined according to the remaining term (in whole years) of the pension, with the flexibility to choose an amount of pension income between 90% and 110% of the annual payment calculated. The pension drawdown relief will allow pension payments between 45% and 110% of the annual calculated payment.

What do you need to do?

Please contact your pension fund provider for information on how the changes will affect their products and how you will be able to take advantage of the reduced minimum.

Click here to read the Federal Government press release issued 30 June 2010.