ASIC amends relief conditions for superannuation and retirement calculators

ASIC's latest amendments, which require superannuation and retirement calculator providers to adjust for inflation in estimates, will commence on 5 December 2019 to provide for a transition period of six months.

In order to adjust for inflation, calculator providers will need to use 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 set out in the instrument is the rate used by ASIC’s MoneySmart superannuation and retirement calculators. It includes a component that reflects changes in the cost of meeting increases in community living standards.

"Adjusting for the cost of meeting increases in community living standards may assist users to better decide if future retirement assets or income will be adequate compared to their standard of living," ASIC said. 

It announced it will amend the instrument in June each year to reflect any changes in the default inflation rate used by ASIC’s MoneySmart superannuation and retirement calculators. This rate is reviewed and updated annually. 

According to ASIC, superannuation and retirement calculators can be a useful and cost-effective educational tool through which users can better understand their financial circumstances and goals.

The amendments to the instrument will promote the comparability of superannuation and retirement estimates while providing flexibility for providers to use a different inflation rate assumption where it is reasonable to do so.

Until commencement of the changes on 5 December 2019, superannuation and retirement calculators must disclose whether or not estimates take into account changes in the cost of living.