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ASIC takes action on industry fund modelling flaws

ASIC has taken action against the advocacy group for industry super funds after finding discrepancies between the calculations used in its early super release modelling and those available for members to use on its website calculator.

In respons to questions on notice from the parliamentary joint committee on corporations and financial services, ASIC said it had expressed concerns to Industry Super Australia that modelling used to illustrate the alleged consequences of early super withdrawal did not comply with ASIC’s trustee communication principles around the government’s early release scheme.

“Contrary to the ASIC principles, the ISA modelling did not use the same assumptions as the generic calculator on the ISA website,” the regulator said.

ASIC said ISA had reviewed its modelling in response to the regulator’s concerns and would make changes to the assumptions used.

“ASIC is reviewing ISA’s changes and will then consider its next steps,” the regulator said.

The regulator said it had not previously publicised action taken against ISA in this respect as the discussions could be characterised as “preliminary inquiries” and it was not the regulator’s usual practice to do so at this stage of an investigation.

ASIC said while ISA’s actions did not comply with ASIC’s principles as stated in the frequently asked question document ‘How should trustees communicate the potential long-term impacts of the COVID-19 early release of superannuation scheme on retirement balances?’, the principles did not “have the force of law” and thus the actions did not qualify as misleading.