Was ISA inflating its super release impact figures?

superannuation ASIC treasury James Paterson andrew bragg

29 April 2020
| By Mike |
expand image

Key Federal Government back-benchers are claiming vindication after a senior Treasury official suggested Industry Super Australia (ISA) may have overstated the long-run superannuation balance effects of people taking early hardship access of up to $10,000.

The Government back-benchers including Victorian Senator and former IPA staffer, James Paterson and NSW Senator and former Financial Services Council policy director, Andrew Bragg, have highlighted testimony given to a Senate select committee by the Treasury’s head of retirement income policy, Robert Jeremenko.

Senator Paterson pointedly asked the Treasury official about the validity of ISA’s claim that a 30-year-old who withdrew $20,000 over the next two years would have $97,214 fewer dollars in retirement savings by age 67.

Paterson suggested that this figure was substantially higher than indicated by ASIC’s MoneySmart calculator.

Jeremenko said the reason was that the ISA was using “nominal figures, rather than real”.

He suggested this was “inconsistent with what the Australian Securities and Investments Commission (ASIC) has told super funds, or anyone who is making public statements about balances on withdrawal of super balances”.

“Generally the well-respected methodology to predict the time value of money is to take into account an inflation adjustment,” he said suggesting that using a “nominal figure gives a larger hit to retirement balances”.

Senator Paterson later used social media to distribute a video of Jeremenko’s testimony, something which was retweeted by Senator Bragg.

Read more about:


Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry



Get rid of the rest of the old guard to clean up the culture, then you might have a chance....

3 days 11 hours ago
Ray Mitchell

The previous directors and managers of both Dixon Advisory and the ultimate holding company Evans and Partners should be...

3 days 23 hours ago
Old Fella

Why would any Licensee invest in educating and training new advisers, when as soon as the handcuffs come off, they will ...

4 days 3 hours ago

Insignia Financial has unveiled a new operating model and executive team, including a new head of advice, while three senior executives are set to depart the licensee....

4 days 13 hours ago

ASIC has obtained interim orders from the Federal Court to freeze the assets of a registered managed fund and prevent its former director from leaving Australia. ...

3 weeks 5 days ago

The $280 billion Australian Retirement Trust is the first superannuation fund off the block to report its performance for the 2023-24 financial year....

2 weeks ago