Government reduction to minimum drawdown requirements for pension accounts

Temporary change to LGIAsuper’s minimum pension payment amount

In March 2020, the Australian Government passed legislation that temporarily reduced minimum drawdown requirements by 50% for account-based pensions and similar products, to assist retirees during the financial market volatility caused by COVID-19.

This reduction was for the remainder of the 2019/20 financial year, the full 2020/21 financial year and has now been extended for the 2021/22 financial year.

Eligible account types for LGIAsuper members are Allocated Pension, Term Allocated Pension, and Transition to Retirement Pension.

The changes explained

The minimum drawdown requirement is the minimum amount that must be withdrawn from your account each financial year – LGIAsuper refers to this as the minimum pension payment amount.

This amount is calculated using a minimum drawdown rate – LGIAsuper refers to this as the minimum pension factor.

The temporary reductions to this factor are listed in the table below.

 

 Temporary reduction to minimum pension factor
Your age Default minimum pension factor (% per annum)
Reduced minimum pension factor for 2019/20, 2020/21 and 2021/22 (% per annum)
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 plus  14 7

This information temporarily replaces the minimum pension factors listed in LGIAsuper’s Pension accounts Product Disclosure Statement (PDS) issued 1 July 2019.

How to calculate your new minimum pension payment amount

Refer to the table above to find the minimum pension factor for your age on 1 July of the current financial year. 

To calculate your new minimum pension payment amount, you can apply this percentage to your Pension account balance on 1 July of the current financial year. If your Pension account was opened after 1 July this financial year, use your opening account balance for this calculation.

How to update your account with your new minimum amount

You can update your regular pension payments online. Follow these steps to update your account:

  • Login to your account in Member Online
  • Click View payment plan for the Pension account you want to update.
  • Click Change payment plan on the right-hand side of the screen.
  • You can then change your Regular pension payment amount and/or your Payment frequency.

You can also call us on 1800 444 396 to make the change. Please be aware that during the current situation we are experiencing high demand for telephone support with long call waiting times.

Restarting or opening new pension accounts

If you are restarting or opening a new Pension account, your minimum pension payment amount will default to the Government’s reduced rate.

Further information

Information from the Australian Government about this temporary change is available at: