Treasury admits rules impose limitations on retirement products
The Federal Government has initiated a review of post-retirement products, including income streams, with a Treasury consultation paper acknowledging that current rules are imposing limitations.
The review has been confirmed by the Minister for Finance and Acting Assistant Treasurer, Senator Mathias Cormann, who said it was part of the Government’s delivery of its election commitments.
He said the Treasury discussion paper would consider key areas including the regulatory barriers restricting the availability of relevant and appropriate retirement income stream products; the minimum payment requirement for account-based pensions; and facilitating deferred lifetime annuities by extending concessional taxation treatment.
The Treasury discussion paper, issued today, acknowledged that the existing rules “limit the range and features of products that providers can offer”.
“To qualify for the earnings tax exemption, the rules that apply to account-based income streams require a minimum annual payment and the rules applying to annuities include restrictions over the term of the product, variations in annual payments, residual capital value and commutation value,” it said.
Cormann said the discussion paper would be open for comment until 5 September.
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