The Australian Securities and Investments Commission (ASIC) has released a consultation paper proposing reforms for superannuation trustees providing retirement estimates.
Consultation Paper 203 Pension estimates in superannuation forecasts proposes an update to ASIC’s original guidance on superannuation forecasts, regulatory guide 229 and Class Order 11/1227, which were issued in December 2011.
The paper proposes new reforms which would allow super funds to include the age pension as part of a retirement estimate.
“Retirement estimates are an important tool to help super fund members engage with their superannuation and think about their retirement planning,” ASIC commissioner John Price said.
“With the continued growth of the super sector, it is vital that fund members remain confident and informed about the prospects of their fund.
“The updated guidance will allow trustees to provide more accurate estimates in this regard.”
The paper also clarifies that super funds may rely on prescribed assumptions on contributions and earnings when calculating a member’s retirement estimate.
ASIC said it does not expect super funds to make specific enquiries into members’ individual circumstances to ensure the estimate matches prescribed presumptions.
“While the fund may be aware of some of the member’s circumstances at the time of preparing the estimate, such as the member’s current marital status, it would be impossible for the fund to know whether the member will be in the same position at the point of retirement,” the report said.
“The prescribed presumptions have been chosen so that they reflect the circumstances that are more likely to apply to a significant proportion of the Australian population.”
Changes to regulatory guide 229 and Class Order 11/1227 would also make technical amendments to the definition of “administration fees”, rounding of retirement estimates and the wording accompanying retirement estimates.
ASIC noted that it seeks feedback on Consultation Paper 203 from superfunds, consumers and interested stakeholders by April 19.
The regulatory guide is due for release on April 30.
