Joint Accounting Body submission for ASIC Super Calculator exemption consultation
CA ANZ and CPA Australia welcomes most concepts in ASIC’s consultation paper 351 on revising super calculator financial services licensing concessions
In brief
- Joint accounting bodies support most proposals made by ASIC
- Retirement estimates and super calculators should not be separate
- We made a number of proposals to improve the proposed ASIC exemption
CA ANZ and CPA Australia consider that retirement estimates and superannuation calculators are likely to form the backbone to a future, functionality-based, approach by trustees to interacting with superannuation members. However there is a conflict between traditional views of retirement estimates and superannuation calculators, and the idea of convergence.
We also consider 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, as well as calculators provided by trustees outside of enhanced retirement estimate functionality, such as those provided to the general public on fund websites.
CA ANZ and CPA Australia consider that retirement estimates and superannuation calculators are likely to form the backbone to a future, functionality-based, approach by trustees to interacting with superannuation members.
The joint accounting bodies made a variety of recommendations, including:
- Default information for superannuation calculators should resemble parameters for retirement estimates as closely as possible
- The proposed exemption to present values in retirement estimates for members retiring in less than two years is inappropriate and should not proceed
- Relief should extend to trustees willing to provide retirement estimates to members who have not made or received a contribution to their account during the year; have an account balance of less than $6,000 at the date of the estimate; or have a defined benefit interest in the fund
- The removal of the no-action position in RG 229 should not proceed unless there is assurance that trustees who follow the methodology and assumptions proposed in CP 351 – or have sought their own specific exemption from ASIC – will not be in a position to be considered by ASIC to have misled a member
We 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.
We indicated some concerns around how trustees can exclude employer contributions which, in their opinion, have not been made compulsorily.
