Jeremy Cooper
The Australian Securities and InvestmentsCommission (ASIC) has released a consultation paper investigating how fund members can be provided with superannuation forecasts of their savings.
The consultation paper — Superannuation Forecasts — looks at how super funds can give their members an estimate of their final retirement savings based on how much they have saved at that time, and offers two possible options for calculating their savings, either by an online calculator or on paper. It also investigates whether there are any risks of liability to superannuation funds, and the changes to regulation that would be needed to provide such estimates. Current legislation restricting advice to fund members means such estimates are rare.
Jeremy Cooper, deputy chairman of ASIC, said: “Many people don’t know how much they will retire with and what kind of lifestyle they will be able to afford. It might shock some people, but we want them to see a super snapshot of their projected end-benefit in time for them to do something about it.”
Both the Association of Superannuation Funds of Australia (ASFA) and the Investment and Financial Services Association (IFSA) have come out in support of the research being undertaken by ASIC.
Chief executive of ASFA Pauline Vamos said that many Australians do not engage with their super and would benefit from access to a forecast of their retirement funds.
“The harsh reality is that the bulk of Australians will not achieve the standard of living in retirement that they want and need on their current rates of saving. Providing fund members with personalised projections based on their current contribution rate would, in effect, give them a wake-up call.”
The chief executive of IFSA, Richard Gilbert, said they were pleased that were would be a chance for an “industry-wide discussion” of the paper before ASIC made further recommendations.
Feedback on the consultation paper is due at the end of October.
