ASIC has released Regulatory Guide 276 Superannuation forecasts: Calculators and retirement estimates (RG 276) and a new legislative instrument updating the relief which facilitates the provision of superannuation calculators and retirement estimates.
Superannuation calculators and retirement estimates are low-cost forecasting tools that are intended to be a helpful prompt for consumers to review their financial situation, and if appropriate, seek further information or financial advice. Entities, such as superannuation trustees, that provide these tools to consumers within the terms of ASIC’s relief are exempt from certain regulatory requirements related to providing personal financial advice.
ASIC Commissioner Danielle Press said, ‘Superannuation calculators and retirement estimates are important tools that can help consumers engage with their superannuation, especially as they approach retirement.
‘ASIC’s guidance will give greater clarity to trustees about how they can use calculators and retirement estimates as part of their strategies under the retirement income covenant, which came into effect on 1 July 2022.
‘The updated relief will also provide greater flexibility in how trustees can give retirement estimates to their members, including through interactive tools. It introduces a single framework for setting economic and financial assumptions across both retirement estimates and superannuation calculators. We expect trustees that choose to provide these tools to do so in a way that fosters informed decision making by members, without promoting specific financial products,’ Ms Press said.
The new relief for superannuation calculators and retirement estimates is set out in ASIC (Superannuation Calculators and Retirement Estimates) Instrument 2022/603. This instrument took effect on 1 July 2022.
ASIC has provided a transition period of six months, during which providers of superannuation forecasts may rely upon either the existing relief or the new relief. Only the new relief will be available from 1 January 2023. The existing relief is provided through ASIC (Generic Calculators) Instrument 2016/207 (for superannuation calculators) and ASIC Corporations (Repeal and Transitional – Relief for Providers of Retirement Estimates) Instrument 2022/204 (for retirement estimates).
ASIC has made consequential amendments to remove superannuation calculators from ASIC (Generic Calculators) Instrument 2016/207 and the accompanying Regulatory Guide 167 AFS Licensing: Discretionary powers (RG 167) from 1 January 2023. ASIC has also made some minor and machinery changes to Instrument 2016/207 with immediate effect, including to clarify that users should be able to input or change the inflation assumptions.
Background
Superannuation calculators and retirement estimates may involve personal financial advice. ASIC gives class order relief from Australian financial services (AFS) licensing and personal advice requirements in the Corporations Act 2001 for providers of these tools.
ASIC updated the relief following consultation with industry through Consultation Paper 351 Superannuation forecasts: Update to relief and guidance (CP 351) (refer 21-309MR). We received 29 submissions in response to CP 351. ASIC’s response to those submissions is summarised in Report 731 Response to submissions on CP 351 Superannuation forecasts: Update to relief and guidance (REP 731). ASIC also sought advice from the Australian Government Actuary on key actuarial issues.
Under ASIC’s relief, a financial calculator, including a superannuation calculator, may be provided by any person, and a retirement estimate may only be provided by a superannuation trustee. To rely on ASIC’s relief, providers must comply with the conditions set out in the legislative instruments.
ASIC offers consumers a range of resources relating to superannuation and retirement through the Moneysmart website. ASIC has updated some assumptions in the Moneysmart superannuation and retirement calculators so they are consistent with key aspects of the settings in the new relief. Separately, ASIC will be reviewing the investment and fee assumptions for the Moneysmart calculators with a view to incorporating any further updates by September 2022.
Download
- Regulatory Guide 276 Superannuation forecasts: Calculators and retirement estimates (RG 276)
- ASIC (Superannuation Calculators and Retirement Estimates) Instrument 2022/603
- Non-confidential submissions to Consultation Paper 351 Superannuation forecasts: Update to relief and guidance (CP 351)
- Report 731 Response to submissions on CP 351 Superannuation forecasts: Update to relief and guidance (REP 731)
- Regulatory Guide 167 AFS Licensing: Discretionary powers (RG 167)
- ASIC Corporations (Amendment) Instrument 2022/604