Most Mercer Super members should receive their 2022/23 annual statements by early November. For more information, as well as frequently asked questions visit mercersuper.com.au/statements.

Temporary reduction in minimum pension drawdown payments

The Government’s temporary reduction in pension minimum drawdown rates ceased on 1 July 2023.

In March 2020, the Federal Government halved the pension minimum drawdown rate for account-based pensions, transition to retirement pensions and similar products. This was a temporary response to COVID-19, to help provide Australians with more flexibility in how they managed their superannuation assets during uncertain times.

These temporary drawdown rates were in effect for the 2019/20 to 2022/23 financial years, and ended on 1 July 2023.
 

Drawdown rates


The minimum amount you need to withdraw from your pension account is determined by both your age and balance as at 1 July each financial year. 

The below table highlights both the temporary and standard drawdown rates.
 

Age

Temporary drawdown rate

Standard drawdown rate

Under 65

2%

4%

65 to 74

2.5%

5%

75 to 79

3%

6%

80 to 84

3.5%

7%

85 to 89

4.5%

9%

90 to 94

5.5%

11%

95 and over

7%

14%

Please note, if you’ve celebrated a milestone birthday (65, 75, 80, 85, 90 or 95) between 1 July 2022 and 30 June 2023, the pension minimum drawdown rate will increase more than 50%.
 

Example

Cooper is 67 years old as at 1 July 2022. For the previous financial year, under the temporary drawdown rate, Cooper would only need to drawdown 2.5% of his balance (as at 1 July 2022).  

As the temporary drawdown rates have now ceased and the standard rates resumed, for the current financial year he will need to withdraw at least 5% of his account balance (as at 1 July 2023).
 

Frequently asked questions


We appreciate that you may have questions about this change and what it means for your account, which is why we’ve prepared a list of frequently asked questions.

  • What happens from 1 July 2023?

    The standard drawdown rates have been used to calculate your payments for the 2023/24 financial year. If you have told us that you want to receive the minimum each year, it’s likely, compared to the previous financial year, that you will see an increase in your pension payments. 

    If you have told us you want to receive the maximum amount permitted for Transition to Retirement pensions, or if you are receiving a nominated amount (for example your payments are increased by the CPI rate, where your pension allows), you will continue to receive these payments.

  • When will I see updates to my pension payment on my account?

    If you’ve opted to receive the minimum pension payment amount, the new amount for the 2023/24 financial year will visible in the ‘Withdrawals’ section of your online account from Monday 10 July. You can access your account by logging in via our secure online portal, Member Online at mercersuper.com.au/login or via our mobile app, which you can download at the Apple App Store or Google Play.

    If you have requested a change to your payments, these updates will be reflected in your online account within 10 business days, and a confirmation letter will be sent.

  • How do I change my pension payment amount?

    You can update your pension payment amount by: 

    • Logging into your account and editing your current withdrawal details on the ‘Withdrawals’ page, or 
    • Downloading and completing the Pension Variation form. Return the completed form to: Mercer Super Trust - Allocated Pension Division, GPO Box 4303, Melbourne, VIC 3001.
       

    Please note, as the Australian Government sets the pension minimum drawdown rates, we’re unable to set your pension payment amount below your calculated minimum payment.

We’re here to help


If you have any questions please contact your adviser if you have one, or our Helpline on 1800 682 525, Monday to Friday, 8am – 7pm (AEST/AEDT). 

Please note, as the Australian Government sets the pension minimum drawdown rates, we’re unable to set your pension payment amount below your calculated minimum payment.

 


Disclaimer: This content has been prepared on behalf of Mercer Superannuation (Australia) Limited ABN 79 004 717 533, Australian Financial Services Licence #235906, the trustee of the Mercer Super Trust (‘Mercer Super’) ABN 19 905 422 981. Any advice is of a general nature only, and does not take into account the personal needs and circumstances of any particular individual. Prior to acting on any information, you need to take into account your own financial circumstances. Please consider the Product Disclosure Statement, Product Guide, Insurance Guide, and Financial Services Guide before making a decision about the product, or seek professional advice from a licensed, or appropriately authorised financial adviser if you are unsure of what action to take. Past performance is not a reliable indicator of future performance. 'MERCER' is a registered trademark of Mercer (Australia) Pty Ltd ABN 32 005 315 917.

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