SMSF Rule Change Extension – Account Based Pensions

The concession halving the minimum amount an account-based pension has to pay has been extended to financial year 2010-11.

The annual minimum is set as a percentage of the pension account balance at the start of the financial year.

What this concession means is that those under 65 once again only have to draw out 2% of their pension balance, not the regular 4%.

The other minimums (under the concession) are…

• 2.5% for those age 65-74
• 3% for those age 75-79
• 3.5% for those age 80-84
• 4.5% for those age 85-89
• 5.5% for those age 90-94
• 7% for those aged 95 or over

The extension of the concession is good news for those who have no immediate need for income and prefer to continue to strengthen their financial position.