Industry Super Australia has been forced to revise the modelling underpinning their calculations of the impact of the government's Early Release Scheme on retirement balances.
An ASIC missive caused the peak body for industry superannuation to reconsider how it calculated the impact of the ERS initiative on retirement balances of super fund members, a response to a Parliamentary Joint Committee on Corporations and Financial Services question on notice reveals.
ASIC was asked by Liberal Senator and Committee chair James Paterson what action it had taken on ISA's decision to use nominal rather than real figures in projecting the impact of the policy on member's retirement balances, following the testimony of Treasury division head retirement income policy Robert Jeremenko.
The regulator revealed it wrote a letter to ISA on April 20, asking about the modelling underpinning industry super's estimates.
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The regulator's letter told ISA it was concerned the peak body had failed to follow ASIC's directives on how trustees should communicate the potential long-term impacts of accessing super early, by using different assumptions to those employed by the generic calculator on ISA's website.
"The ASIC principles are intended to assist trustees by describing how they might minimise their risk of providing misleading disclosure. It is important to note that they do not have the force of law and estimates are not misleading merely because they do not comply with the ASIC principles," ASIC said.
A fortnight after ASIC's letter landed at ISA, the peak body responded to the corporate regulator, and said that upon review of its calculator it had decided to make changes to the assumptions used in its ERS modelling and the calculators on its website.
As a result, ASIC is currently reviewing ISA's changes.
However in an interesting twist, ASIC said ISA's modelling did not use nominal dollars in place of real dollars, contradicting Jeremenko's evidence.
"This is not the focus of ASIC's engagement with ISA on this matter," ASIC said.