How new pension rules could affect how much you can draw as an annuity
The Financial Sector Conduct Authority says a sustainable income level might result in a monthly pension below the amount a retiree needs
The retirement fund regulator has released draft rules around what percentage of your retirement savings you can draw as an annuity if at retirement you opt for a pension chosen by your retirement fund trustees. The Financial Sector Conduct Authority (FSCA) has released a draft conduct standard proposing new maximum drawdown rates determined by age band and gender for default annuities or monthly pensions offered by funds. For example, a man at age 65 will be able to draw a maximum income annually of 5.5% of his retirement capital and a woman of the same age 5% in a default annuity. New regulations under the Pensions Funds Act, which take effect in March next year, oblige all pension, preservation and retirement annuity funds to establish a default annuity strategy for retiring members. The standard will guide your fund on how to ensure you draw a sustainable income when you use investments in a living annuity to provide an income. It obliges funds to monitor drawdowns and retiremen...
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