In the face of a formal letter from the Australian Securities and Investments Commission (ASIC) Industry funds advocacy group Industry Super Australia (ISA) has changed its modelling around the impact of people obtaining early access to superannuation.
Just days out from ISA executives being forced to front a Parliamentary Committee, ASIC has revealed it wrote to Industry Super Australia late last month “asking questions about the modelling underlying their estimates of the impact of early release of superannuation on retirement balances”.
However, ASIC has yet to decide what, if anything, it is going to do about ISA.
ASIC said that in its letter to ISA, the regulator had “expressed concern that the ISA modelling did not follow all of the principles that ASIC articulated in a frequently asked question published on ASIC’s website on 16 April, 2020: How should trustees communicate the potential long-term impacts of the COVID-19 early release of superannuation scheme on retirement balances?”.
“Contrary to the ASIC principles, the ISA modelling did not use the same assumptions as the generic calculator on the ISA 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.),” the ASIC answer said.
“On 4 May ISA responded to ASIC’s letter stating that it had reviewed its early release modelling and website calculators and that, as a result of that review, it would make changes to the assumptions used in its early release modelling and website calculators,” it said.
“ASIC is reviewing ISA’s changes and will then consider its next steps,” ASIC’s answer said.
However in a positive note for ISA, ASIC said it had noted that contrary to the original evidence provided to the COVID-19 Senate Select Committee by Treasury official, Robert Jeremenko, the ISA estimates were “in real, rather than nominal dollars and this is not the focus of ASIC’s engagement with ISA on this matter”.
Both ISA executives and those from industry funds-owned bank, ME Bank, have been directed to attend a special hearing of the House of Representatives Standing Committee on Economics this week.