by Zoe Bagnall
With the baby boomers starting to retire there will be an
increased number of people moving into their SMSF pension phase and
with this comes the need to start considering the requirements of
making minimum pension payments.
Funds in the pension phase must make minimum cash payments each
year to qualify for tax-free benefits. The amount increases with
the age of the member. This drawdown rule is partly designed to
ensure people use their SMSF to cover the costs of retirement and
not as a means of hoarding wealth. With the increase in the number
of people entering the pension phase, it is expected that more
errors will be made around pension payments.
The rules are strict and are easy to inadvertently breach (a
common breach is the occurrence of loans being made from an SMSF to
members). The requirements involve the minimum pension payments and
there are not many allowable concessions. With the drawdown rules
being particularly difficult for those
