People running a self-managed superannuation fund (SMSF) need to ensure that they calculate the new minimum pension payment correctly.
It’s not a matter of merely calculating the annual pension payment using the normal pension drawdown factors and halving it.
For example, take Rochelle, aged 66, who has an account-based pension. Her balance at July 1, 2020 was $640,220. The “normal” minimum is 5% x $640,220 = $32,010 (rounded to nearest $10) The “new” minimum is 2.5% x $640,220 = $16,010 (rounded to nearest $10) It is not 50% x $32,010 (“normal” minimum) = $16,005.
In the 50% case, the minimum has not been met, which may mean the member has not been running an account-based pension during the year. Thus, earnings, including capital gains, will not be tax-free.
Source: Fitzpatricks…