In his latest article written for Alan Kohler's Eureka Report, Scott looks at the recent announvement from the Federal government halving the minimum pension draw down requirements for the 2008-09 year. Scott comments that the change will help people avoid having to sell super fund assets, such as shares, to pay their minimum pension in an environment where the value of assets may have fallen by 50% or more.
Scott concludes by suggesting that:
The change to the minimum withdrawal laws in allocated pensions is very good news and a practical response from the government to the exceptionally difficult markets facing investors. Forcing investors to sell shares into a falling market has been the opposite of dollar cost averaging and the opposite of good sense.
There is no decision at this stage of to extend the plan beyond June 30 this year. Sherry is set to review the plan in a few months time, so it may be extended but it is impossible to say.
In addition, it's worth noting the changes to the age pension assets test, which came into effect towards the end of 2007 and allowed (for example) a home-owning couple to have $870,000 worth of assets excluding the value of their home, also provides the potential cash flow safety net for retirees.
For the entire article please click on the following link - Reprieve on SMSF pensions.