Technical update: Economic Response to the Coronavirus March 2020, assumptions update and default start date changing to 1 July 2020

31 March 2020

In this release

Technical update (economic response to the Coronavirus March 2020)

On 23 March 2020, the Australian Government released the "Economic Response to the Coronavirus", so the following technical details have now been updated in Pathfinder:

  • Temporarily reducing pension minimum drawdown rates. These are reduced by 50% for the 2019/20 and 2020/21 financial years.
  • Age Pension deeming rates have been further reduced and take effect from 1 May 2020. The new rates are 0.25% lower and 2.25% upper. Since Pathfinder operates on an annual basis the changes are applied from the 2020/21 financial year.
  • Early access to super - Qualifying persons can access $10,000 in 2019/20 with a further $10,000 in the first 3 months of 2020/21 as a non-taxable withdrawal from super.  This has not been especially implemented in Pathfinder, but we have the data entry steps on How to model early access to superannuation (economic response to the coronavirus).

This change will apply to all results in all cases that are solved on or after 31 March 2020 (irrespective of the case creation date).  If your scenario was solved before 31 March 2020, you can update your results by clicking 'Start solve' again.  It is recommended that you re-solve all scenarios in active cases so your results are consistent (for more information, see How to check when your results were created).

Assumptions update

The Optimo Financial default returns have been updated. Specifically, the return on cash has been reduced from 1%pa to 0.25%pa. So the following assumptions have been changed accordingly:

  • Cash
  • Term deposits
  • Superannuation investments and shares/Managed funds profiles that contain cash: Secured, Defensive, Conservative, Balanced, Growth, High Growth

For our latest assumptions, see Optimo Financial Default Assumptions.

These new values will apply to any cases created on or after 31 March 2020. If you created your case before 31 March 2020, then the older values will be used. Pleaes contact Optimo financial if you would like to update your case to use the new assumptions. To check what assumptions are being used in your case, on the home page, select the case and check the "Global assumptions version".  As of 31 march 2020, the lastest assumptions are '4', so any number lower than that is using an older version of the assumptions.

Default start date for analysis is now 1 April 2020

On 1 April 2020, Optimo Pathfinder's default start date for analysis will change to 1 July 2020 (i.e. the 2020/21 financial year).

This change is made on April 1 each year because we find that in the last three months of the financial year, it’s neater to start cases from the start of the next financial year. There are more details below about how cases are affected and your options if you want to change your start date.

How new cases will be affected (and what to do if you want to start analysis on 1 July 2019)

From 1 April 2020, when you add a new case:

  • The analysis will start on 1 July 2020.
  • The results and reports will start from 2020/21 and will no longer include 2019/20.
  • When doing data entry in Pathfinder, please be mindful that 2019/20 may still display in some drop-down menus even if it isn’t included your case’s analysis. So, if you want to choose the first year of analysis make sure you actually pick 2020/21 and not just the first year on the list

If you would like to start a new case with the current financial year (2019/20)

When you add a new case, you can choose to start the analysis from 1 July 2019 (e.g. if there are some important actions you've like your clients to take before the end of this financial year). At the Start step, in the Use some sample data section, use the case called '2019/20 blank case'.  Note, you must do this at the beginning, if you have entered data and then want to change the start year, please contact Optimo Financial.

Old cases will not be changed (but there are some options to adjust them)

Any cases created before 1 April 2020, will be unchanged and will continue to have the 2019/20 financial year.

Please Contact Optimo Financial, if you would like to change the start date for an existing case.  If possible, we'd prefer for you to ask us to make adjustments to the case before you start entering more data. Some occasions where you might want to change the date include:

  • The case was created before 1 April 2020, and you would like to move the start date forward to 2020/21.
  • The case was created after 1 April 2020, and you would like to move the start date back to include the 2019/20 financial year. e.g. the individuals would like to do something important before the end of the financial year, such as making super contributions while they are still eligible.
  • As an organisation, you would like to flip to the next financial year on a different date from 1 April 2020.

Please note that charges may apply to change the start date and you should allow 1-2 working days for changes to be made to your case.

Did you miss our previous release with new super fund features?

We've also added some new features, including more options for controlling super contributions.  For full details see New Pathfinder Release (Peron)