This affects mainly account-based pensions.
The regulator said a trustee must ensure all members receiving an account-based pension are paid their minimum pension amount by 30 June. This is calculated by applying the relevant percentage factor based on the member’s age by the member’s pension account balance calculated as of 1 July 2022 or on a pro-rata basis if the pension commenced part way through the 2022–2023 financial year.
If the minimum payment is not made by 30 June, this can result in adverse taxation consequences for the member.
In response to COVID-19, the government temporarily reduced superannuation minimum drawdown requirements for account-based pensions and similar products by 50 per cent for 2019–20, 2020–21, 2021–22 and 2022–23 financial years.
For the 2023–24 financial year, the 50 per cent reduction in the minimum pension drawdown rate will no longer apply.
This means on 1 July 2023 when calculating the minimum annual payment on a pension balance, the 50 per cent reduction will not apply to the calculated minimum annual payment.
To learn more about how to calculate a member’s minimum pension payment and the new rates that will apply for the 2023–2024 financial year, visit minimum pension standards.
