AUSTRALIA - Government has announced changes that would give retirees access to more flexible income stream choices as of the january, 2006.
The reforms, which came about as a result of government’s decision to review pensions in small superannuation funds, will also better enable retirees to manage their financial needs.
The regulations update the allocated pension and annuity draw down factors in line with current life expectancy. Transitional provisions would enable income stream providers to use the old factors for payments made until 30 June 2006, said assistant treasurer Mal Brough. These changes aim to improve income stream choices for all retirees, including those in small funds, by providing more flexible draw down rules for popular pension and annuity products,” he said.
The regulations also extend the maximum term of a market linked income stream, so that payments may continue until the recipient or their pouse reach age 100.
The change will apply to market linked pensions with a commencement day on or after 1 January 2006. Similarly, the regulations extend the maximum term for other life expectancy income stream products with a commencement day on or after 1 January 2006.
In addition, the regulations would allow annual payments from market linked income streams to vary between plus or minus 10% of the payments calculated under the usual payment rules. This change would apply to market linked income streams regardless of their commencement day.
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