Q&A – Minimum pension drawdown

Find out what your peers are asking – based on real-life questions submitted to TechConnect.

By Mark Gleeson, Senior Technical Services Manager

Q: My client, Gabby who is age 72, has drawn a reduced minimum pension of 2.5% in the 2019/2020 and 2020/2021 financial years from her account-based pension. Ordinarily she would be required to draw down 5%. I understand the Government announced the reduced minimum pension drawdown would be extended. How much is Gabby required to drawdown in the 2021/2022 financial year?

A: The halving of the minimum pension drawdown rate has been extended into the 2021/2022 financial year and your client need only drawdown 2.5% to satisfy minimum pension drawdown requirements.

On Thursday 24 June 2021 the Government made regulations to extend the temporary reduction in superannuation minimum drawdown rates through to the 2021-22 financial year.

The table below illustrates the standard minimum and reduced minimum pension drawdown rates.

Account-based pension minimums

Age Standard minimum Reduced minimum for 2021/22
Under 65 4% 2%
65–74 5% 2.5%
75–79 6% 3%
80–84 7% 3.5%
85–89 9% 4.5%
90–94 11% 5.5%
95 or older 14% 7%

More information

If you have any questions, or would like more information, please contact the IOOF TechConnect team on 1300 650 414.

Disclaimer
The information in this section of the website is intended for financial advisers only and is not to be distributed to clients. It has been prepared on behalf of Australian Executor Trustees Limited ABN 84 007 869 794 AFSL 240023, IOOF Investment Management Limited ABN 53 006 695 021 AFSL 230524, IOOF Investment Services Ltd ABN 80 007 350 405, AFSL 230703 and IOOF Ltd ABN 21 087 649 625 AFSL 230522 based on information that is believed to be accurate and reliable at the time of publication.