ASIC told to extend relief around superannuation calculators
While the two major accounting bodies have generally expressed support for proposed updates made by ASIC regarding superannuation calculators and retirement estimates, they have also outlined some concerns.
In a submission to ASIC on its consultation on superannuation forecasts, CPA Australia and Chartered Accountants Australia and New Zealand (CA ANZ) said that while they generally support the proposals to amend legislative instruments on superannuation calculators and retirement estimates, they do have concerns as well.
The submission noted that superannuation calculators and retirement estimates could provide a quick guide at a given point in time as to whether a member is likely to have sufficient income.
“However, we recognise that these tools are also capable of being utilised for purposes for which they are not designed,” it stated.
CPA and CA ANZ stated that they supported the proposal for relief to continue being provided from the licensing and conduct obligations relating to personal advice for providers of superannuation forecasts by making a new single legislative instrument that covers both superannuation calculators and retirement estimates.
The accounting bodies said that while retirement estimates and superannuation calculators are likely to form the backbone to a future, functionality-based approach by trustees to interacting with superannuation members, they noted there is a conflict between traditional views of retirement estimates and calculators and the idea of convergence.
“We disagree that interactive retirement estimates and superannuation calculators should be separate. Indeed, we consider that retirement estimates (and members’ personal information) should form default settings for superannuation calculators, and this provides an excellent basis in our view of how this consultation should envisage convergence of these tools,” the submission stated.
“Although CP 351 only considers retirement estimates and superannuation calculators, it is commendable that these are now being considered as adjoining jigsaw puzzle pieces, rather than unrelated tools designed to serve different aims. We consider that future approaches will see member benefit statements, advice and transactional functionality brought in to complete the picture.”
The submission also suggested that although only fund trustees can provide retirement estimates, the same methodology should be used for default settings of superannuation calculators provided by entities who are not trustees.
It also suggested that warnings be used in the instance that a parameter such as retirement age is changed in a way that adversely affects another parameter, such as where actuarial life expectancy changes to be in excess of the default 25-year drawdown period.
