ASIC gives retirement forecasts class order relief

Superannuation retirement forecasts provided to members by superannuation funds will not be regarded as a financial advice under class order relief provided by the Australian Securities and Investments Commission (ASIC).

The regulator announced the class order relief yesterday, stating that a retirement estimate was "a simple, broad estimate of how much superannuation a member might receive when they retire".

However to access the relief, superannuation fund trustees will need to ensure the retirement estimate is given at the same time as the member's periodic statement and is included in, or accompanies, the statement.

As well, it will need to specify the member's estimated retirement benefit "which is calculated taking into account all the required variables and using the default assumptions" and which sets out mandatory content explaining how the retirement estimate was calculated and the purpose of the retirement estimate.

The ASIC guide covering the class order relief said the regulator considered that, where a superannuation fund trustee of an accumulation scheme "relies on our relief for an account that is still in accumulation phase, it will be able to satisfy its obligation to ensure that it has reasonable grounds for making a representation in relation to a future matter concerning a financial product".

However it warned that it considered that a retirement estimate calculated in the manner specified, and using the assumptions specified, was more likely to be misleading if it was prepared for a member of a an eligible rollover fund; a defined benefit fund; with an account with a small balance; with an account in de-accumulation, rather than accumulation phase; and who is aged 65 years and over.