ASIC has issued a new regulatory guide that sets out guidelines for super fund trustees for providing projected retirement benefits to members.
The corporate regulator issued the guide, RG 229, because trustees that provide estimates of retirement benefits could potentially breach the provisions for personal advice under the Corporations Act.
"Our view is that super fund members may benefit from personalised superannuation forecasts, giving them an indication of how much money they may receive when they retire," ASIC said in the guide.
"We think that such forecasts will help members to engage with their superannuation."
Providing retirement benefit estimates is not mandatory, but the regulator urged trustees to make use of them.
"It is not mandatory for a super fund trustee to provide retirement estimates to its members. However, we encourage trustees to make use of the relief, where possible, to provide their members with the benefit of receiving retirement estimates," ASIC said.
Retirement estimates can be provided in the form of a statement or as a calculator, and the new guide explains how trustees and super fund advisers can get relief from the provisions under the Corporations Act for both tools.
The Australian Institute of Superannuation Trustees (AIST) welcomed the guidelines.
"This guidance will help clarify the circumstances under which super funds and their representatives can provide forecasts," AIST chief executive Fiona Reynolds said.
"It's important to have strict regulations around the assumptions required to calculate retirement forecasts to ensure they are meaningful for consumers."
Reynolds said retirement estimates and calculators had proven to be important member engagement tools.
"Many people see that they have a certain amount in their super, but they don't necessarily understand what this translates to in terms of income to live off," she said.
"Retirement forecasts can encourage people to make extra contributions to their super if they realise that they don't have enough."
The Association of Superannuation Funds of Australia (ASFA) said the guidelines were timely, as funds were looking to develop their intra-fund advice services.
A large part of intra-fund advice was explaining to members how they were tracking to achieve their retirement outcomes, ASFA chief executive Pauline Vamos said.
"This will help get some consistency around calculators and it is a good supportive measure to help the development of intra-fund advice," Vamos said.
