March’s Federal Budget extended its minimum pension drawdown requirement for a further 12 months, thus enabling affluent retirees to keep their superannuation balances without needing to sell their assets.
The biggest beneficiaries of the extension are wealthy retirees, who use superannuation tax breaks to escape tax on funds they are accumulating to pass on to their children. By contrast, it provides minimal benefits to less well-off retirees who need to use money they have accumulated in superannuation to fund their retirement.
Given superannuation fund returns had boomed over prior 18 months, more than reversing the temporary losses in the March quarter of 2020 (when the policy was first announced), the rationale for extending the temporary reduction in the minimum pension drawdown rates was missing.
