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Make forecasts mandatory
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Leading consultancy Towers Watson has suggested the Australian Securities and Investments Commission (ASIC) make the provision of retirement income projections mandatory from 2012.
In an analysis published this week, the company noted ASIC’s proposal for a voluntary projection regime but argued that it should be both mandatory and inclusive of age pension projections.
It pointed out that the age pension was the so-called “first pillar” of the Australian retirement income system and that if it were excluded from forecasts, fund members would not only be denied important information but might focus too keenly on voluntary contributions.
“While we recognise that including the age pension increases the complexity of retirement projections, it should be possible for the Australian Government Actuary to establish a table which shows each level of superannuation retirement income and the corresponding combined income, including the age pension,” the Towers Watson analysis said.
It said this would substantially reduce both the workload of providers and the risk of error in providers determining the combined amount.
AUTHOR
Mike Taylor
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