Defined pensions branded a rort by Treasury
The federal government is considering new rules that would compel retirees to spend their accumulated superannuation during their lifetime. The option is one of several changes foreshadowed in a Treasury discussion paper. Treasury brand defined benefit pensions run out of self managed super funds as “tax-avoidance arrangements” which “provide opportunities for estate planning . . . and even enable the wealthy to gain access to social security benefits”. The discussion paper follows controversy in the wake of the 2004 federal budget. At the time, the government planned to make self managed super schemes buy a pension product from a life company or fund manager, as other super fund members do.