The Australian Securities and Investments Commission (ASIC) has amended relief conditions for superannuation and retirement calculators.
The amendments, which would commence on 5 December, would require providers to adjust for inflation by using either:
- The default inflation rate set out in the instrument for superannuation and retirement calculators, or
- an alternative inflation rate, as long as certain disclosure requirements are met
The default inflation rate would reflect changes in the cost of meeting increases in community living standards to help users to better decide if future retirement assets or income would be adequate compared to their standard of living.
At the same time, the option of using an alternative inflation rate would recognise that there may be instances where it was appropriate for a superannuation and retirement calculator to use a different inflation assumption and would take into account:
- The wage profile of the likely users of the calculator
- the provider’s wage growth outlook
In cases where the alternative inflation rate would exclude a component reflecting the cost of meeting increases in community living standards, the calculator would need provide the explanation of the implications of not taking into account of those costs.
The regulator said that the amendments to the instruments would promote the comparability of superannuation and retirement estimates whilst providing flexibility for providers to use a different inflation rate assumption where it was reasonable to do so.