This may seem dry fare after an early autumn weekend but I read this post with a lot of interest.

The Australian Government , through its corporate, markets and financial services regulator, ASIC, is putting out guidance to those running its Super Schemes on the likely economic conditions ahead.

Harry, a friend to this blog, is alerting us to the impact of revising down long-term growth in wages, it will lead to lower contributions to Super but also to lower expectations in retirement , for those who want their retirement income to keep pace.

We don’t get this from our Government or its Regulators, but perhaps we should.

I know there is input into the Statutory Money Purchase Illustrations but how people work out these things is so secret squirrel, all but a handful of actuaries know what’s going on.

If we had a common way of gauging what is likely to go into our pot and the rate we could draw it out, wouldn’t it be easier to work out whether we were on track to meet our needs?

My partner returned from a wedding last week and she tells me she got into a conversation with a couple who reckoned they’d need £80,000 pa in today’s terms to stop working. The coruscating conversation at the reception revolved about what they should be doing in their forties to stop work at the earliest opportunity. The numbers mentioned by my partner went down like a lead balloon. The truth was not acceptable, they said they wanted that “officially”.

With the dashboard (slowly) approaching, I’d like to think that part of our “common purpose” in pensions would be to get some common modelling tools together which said the same thing in different ways.

The Government has a relatively short window to organise this but it is surely not beyond the wit of man (or GAD) to set out what it reckons our pension estimates should be based on and for those numbers to be soft-coded into projections as APRA expects?

There are of course variables and Harry mentions a few. You don’t have to be an actuary to work out that “timing effects for investment & admin fees and fund tax accruals” are likely to produce some regional variation, but can’t we get some solidarity on the minutiae too? With all the different working groups that ponder these things at the IFOA, ABI and IA, can’t we all agree on a common methodology to help ordinary people do their planning with “official numbers”?

We need benchmarks and the Government should be setting them. If  MaPS published its numbers and private providers exceeded or low-balled MaPS projections, shouldn’t “comply or explain” come into it? In a world of instant information, I’d like to see any private  projection on future pot or pension alongside the Government’s projection and a simple explanation on variations!

This is the kind of financial education the public needs and deserves. It doesn’t have to be hard, it can be made easy and even fun.

Just like Harry did on linked in – well sort of!

We have until October 2026 to do so!

Image thanks to Retirement Line