ASIC has updated Corporations (Superannuation Calculators and Retirement Estimates) Instrument 2022/603 in respect of the default wage growth assumption required to be used in super forecasts. The change will align the wage growth assumption used in regulations with the Government’s Intergenerational report 2023, a value of 3.7% p.a. There is no change to the default value of price inflation (remains at 2.5% p.a.)

We will update all Australian versions of RIS to reflect this change around the end of October

• The change will be visible in a new default value of Improvements in living standards of 1.2% p.a. This value is added to price inflation to determine wage growth.
• The today’s dollars value of super balances up to retirement age will be higher than under the previous wage growth assumption of 4% p.a.
• The indexation of the Age Pension (with wage growth) will be lower than previously; hence more super will be drawn for the same total retirement income.

Note this is a change in the assumptions for retirement modelling only, to align with the Government’s economic outlook. There are no changes to super rules.

Tags: asic compliance regulation wage growth