Faced by ASIC questioning ISA changes its early access super calculations

13 May 2020

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.

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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.




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Ask the ISA funds about some of there other categorisations and 'modelling' while you're at it!

What a token slap on the wrist. All for show now that ISA has come under fire publicly and doesn't touch on any aspect that is truly a problem with this ponzi scheme.

"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."

Should be easy enough for them. They'll pop across after one of their regular team meetings with the federal Labor MP's, after instructing them on the latest union requirements of their Canberra puppets.

What a joke.
This nothing other than window dressing and pretend.
" ASIC is reviewing ISA's changes and will then consider it's next steps", ASIC's answer said.
There wont be any next steps...guaranteed.

just imagine the uproar if it were retail funds. Hypocrisy!

"If not why not" ASIC.
Well, in this situation perhaps it is because it is ISA and ASIC appears to have given ISA some clear legal advice as to why not.
"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."
It appears nothing will happen. Who is surprised?

Was that puppets or muppets?

The conflict of interest with ASIC commenting (with a likely slap on the wrist) on ISA, when they place all their super with Aus Super..... This doesn't pass the pub test.

Also, next time I "model" a balanced portfolio, i'll just use my own figures. 25% annual growth. Seems like you are allowed to use anything, based on ASICs comments.

Why stop at 25%? Apparently you can dial it down to 0% cash and 0% fixed interest like HostPlus's balance default option, which accounts for something like 95% of their members. They have 7% in credit, but for all we know, that could be sub-investment grade junk bonds. The rest of the stuff is risky and should never be labelled defensive. The fact that ASIC, APRA and the ACCC have all ignored this gross mislabelling is an indictment on those institutions. Why do we need a market crash and consumers to be harmed before our regulators to wake up?

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