AUSTRALIA - The government's new transition to retirement regulations, which allow people to keep working yet draw down on their superannuation benefits, will make a significant difference to people's retirement horizons, says the Association of Superannuation Funds Australia (ASFA).
The regulations, released this week, are set to take effect in July. The new measure allows people who have reached the age at which they are entitled to access their super benefits to take some of their super in the form of a non-commutable income stream, without having to retire.
“The transition to retirement measure will give people in their late 50s and early 60s many more options as to how they structure their work and retirement income,” said Philippa Smith, CEO of ASFA. “Hopefully many more will take up casual or part time work opportunities in the knowledge that the red tape relating to superannuation work test rules has been removed.”
Minister for revenue and assistant treasurer Mal Brough said: “It is anticipated that this innovation will complement other Howard government initiatives to help older Australians who want to stay connected to the workforce by removing an artificial barrier.”
The regulations complete the implementation of the policy initiatives announced by the treasurer in February last year for a more flexible and adaptable retirement income system.
Under the policy, allocated pensions can’t be commuted and cashed out as a lump sum while a person is still working. However, once a person retires or reaches age 65, they will have the option to commute the allocated pension and access their full benefits.
The regulations: do not impose a work test, do not cap the amount of benefits a person can access, allow individuals to use existing pension products, allow people who purchase an allocated pension to stop (or commute) their income stream and return the benefits to their super fund.
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