RSM Australia

Superannuation: Year-end planning and pensions

Wealth Management Insights


A key feature of a superannuation fund paying pensions is that the earnings on the assets supporting the pensions are not subject to income tax.  This can result in the interest, dividends, rent, capital gains and other income of the fund being tax free.  In addition a fund is also eligible for a refund of any excess franking credits on dividends received.

In order to be eligible for the income tax exemption, the fund needs to have paid the specified minimum amount to the member during the financial year.

Account based pension withdrawal minimum proportions are as follows, with the percentage determined by the members age:

Under 65 4 %
65-75 5%
75-80 6%
80+  7% and higher


Should the minimum pension amounts not be met before the end of the financial year the fund may not be entitled to the income tax exemption on the earnings for the year.  The ATO does allow for shortfalls to be made up in limited circumstances, however it is advisable to pay the required minimum before the end of the financial year.

Self Managed Superannuation Fund trustees should review the minimum pension requirements for the financial year now and put in place steps to have the minimum paid out before 30 June.

This article has been prepared by RSM Financial Services Australia Pty Ltd ABN 22 009 176 354, AFS Licence No. 238282.

As everyone's circumstances are different and this article doesn't take into account your personal situation, it is important that you consider the above in light of your financial situation, needs and objectives, and seek financial advice before implementing a strategy.
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