It is a requirement that a minimum payment be made from a superannuation pension at least annually. Minimum amounts are determined by age and the value of the account balance at 1 July each year.

The rule is designed so that retirees drawn down on their super savings over their retirement and recognises the substantial tax concessions available. These are lost where you do not make the minimum required payment.

There is no maximum cap if you are drawing down on an account based pension but there is a 10% upper cap where you are in receipt of a Transition to Retirement Income Stream (TRIS). The following table shows the minimum percentage factor for each age group.

We recommend that pension payments are reviewed to ensure that the total pension received by 30 June 2012 falls within the mandated range.

Please contact your Ruddicks adviser IMMEDIATELY if you are unsure of what your minimum or maximum amounts are and how much you should have withdrawn during the 2012 financial year.

Considering making a super contribution? Beware of breaching contribution caps!

There are caps on how much super you can contribute each year before being required to pay excess contributions tax at the rate of 46.5% of the excess. There are two types of superannuation contribution caps which apply each financial year:

1. Concessional (before tax) contribution caps. Concessional contributions include:

• All employer contributions (including salary sacrifice)
• Personal contributions for which you claim an income tax deduction (e.g. personal contributions by self-employed people)

The concessional contribution cap is $25,000 per income year generally, and $50,000 per income year for taxpayers aged 50 years old and over for the 2012 income year.

WARNING! Please note that from 1 July 2012, the concessional contributions cap for taxpayers aged 50 and over will be halved to $25,000! This means that if you are over 50 and are currently making salary sacrifice contributions into superannuation, you will need to promptly review and, if necessary, adjust the salary sacrifice amounts to avoid breaching the $25,000 cap for the 2013 income year. Your Ruddicks adviser can assist you and provide further information in relation to this matter.

We therefore recommend that where possible, taxpayers aged 50 or over consider taking advantage of the higher concessional contributions cap available to them, that is $50,000, in the 2012 income year.

If you are unsure if you will be affected by this change to the concessional contributions cap, please contact your Ruddicks adviser as soon as possible to discuss this.

1. Non-concessional (after tax) contribution caps. Non-concessional contributions include:

• Personal member contributions (no tax deduction claimed)
• Spouse contributions
• Any excessive concessional contributions

The non-concessional contributions cap is $150,000.

TAX TIP! You should consider making additional contributions before the end of the income year to take full advantage of these caps. But make sure you do not exceed the contributions caps under any circumstances – just a few extra dollars can result in a substantial tax liability for excess super contributions tax!

Please remember that 30 June 2012 is a Saturday and thus any superannuation contributions made on 30 June 2012 will NOT be processed during the 2012 income year and will therefore count towards your 2013 superannuation caps! Please plan ahead and make transfers several days in advance to allow for timely processing.