What's new

Mortality rates updated

Tuesday, 25 March 2025

The Simulator 'Chance of survival' bar shows the likelihood of reaching selected ages based on your age and sex, and on the balance chart the age your super runs out includes the chance you will live to that age. These numbers are calculated based on mortality tables prepared after each census. Alongside the mortality rates are rates of mortality improvement. At most ages the mortality rates are improving (reducing) by up to 2% p.a., so that the rate of death for a 60 year old in 20 years is forecast to be perhaps 20% less than it is today.

Both the Australian and NZ governments have released new tables in recent years, and we have just loaded these tables into the Simulator.

Tags: mortality lifetable survival

ASIC regulations for super forecasts updated

Monday, 14 October 2024

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

Calculator update 1 July 2024

Monday, 1 July 2024

Today we released the updated Retirement Income Simulator for the 2024-25 financial year. There were no changes to the underlying calculations, just parameter updates as follows:

• Stage 3 income tax cuts
• Co-contribution eligibility income threshold to $45,400
• SG minimum rate to 11.5% of salary
• SG maximum contributions base to $260,280
• Age pension means test and deeming thresholds
• Underlying indexed values of contribution caps and transfer balance cap

In addition, disclosure relating to these parameters was updated.

Calculator update 1 July 2023

Monday, 3 July 2023

Today we released the updated Retirement Income Simulator for the 2023-24 financial year. There were no changes to the underlying calculations, just parameter updates as follows:

• Co-contribution eligibility income threshold to $43,445
• SG minimum rate to 11.0% of salary
• SG maximum contributions base to $249,080
• Age pension means test and deeming thresholds
• Underlying indexed values of contribution caps and transfer balance cap
• Removal of minimum drawdown relief that had applied in earlier years

In addition, disclosure relating to these parameters was updated

Tags: update

Superannuation calculator regulatory update goes live

Tuesday, 20 December 2022

Further to our post on 14 July, the required regulatory changes were released in an update that included the following changes:

• Standard default inflation rates of 4% p.a. for salary growth and 2.5% p.a. for price growth
• Ensure that default investment returns are consistent with the standard default inflation rates (RG 276.212)
• Future values are deflated using salary growth for the period up to retirement age and price growth for the period after retirement age
• Relevant disclosure updates that reflect these changes

The changes that will be most obvious to users of the Retirement Income Simulator are in relation to retirement adequacy. To speak meaningfully of a level of retirement income, you need to index the income at the same rate you deflate it. ASIC now requires that retirement income is deflated with price growth; we have therefore changed the indexation of retirement income to price growth, instead of wage growth. This will give the appearance that retirement incomes are higher, last longer or both. In reality this is because retirement incomes grow more slowly under the new approach, and will not keep pace with improvements in living standards enjoyed by the wage earning community.

A related change is the presentation of the Age Pension. In reality, the Age Pension is indexed with the higher of wage and price inflation; in the long term this is wage inflation. Hence in the Simulator, you will see the Age Pension growing in real terms even after the maximum entitlement is reached. This is because it increases with wage growth, but is being deflated with price growth.

Tags: regulation