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Assessment Activity 1
Activity instructions to candidates
- This is an open book assessment activity.
- You are required to read this assessment and answer all 10 questions that follow.
- Please type your answers in the spaces provided.
- Please ensure you have read “Important assessment information” at the front of this assessment
- Estimated time for completion of this assessment activity: 2-3 hours
Describe a market-linked fund.
Describe a defined benefit.
The bring-forward rule allows a fund member to bring forward two years of non-concessional contributions from the future if they under age 65. From 1 July 2017, for people under 65, what are the maximum bring forward limits based on their total superannuation account balance?Explain your answer.
Alice believes you may as well die when you retire, so she chooses to continue to work on a casual basis at Bunnings.She is 68 years old and works exactly 30 hours each month of the year. She wants to contribute her own funds into superannuation, and seeks your advice as to whether she is able to contribute to super to top it up. Can she contribute into her super fund, based on her age? Why or why not?
Using an example, explain how salary sacrificing can reduce a person’s marginal tax rate.
Could all employees benefit from salary sacrificing some of their salary into superannuation? Explain your answer.
Complete the following table to show that you understand the way that fund earnings are taxed in the superannuation environment effective from 1 July 2017.
|Earnings tax on income returns||Earnings tax on capital returns|
|Transition to retirement income stream phase|
|Retirement income stream phase|
Explains the ‘pension benefits cap’. What phase of superannuation does this cap apply to?
Your clients are Mr and Mrs Jones. They are in their mid-50’s and they are planning for their retirement in 10 years’ time. Mr Jones has a much higher superannuation balance than Mrs Jones and the pension benefits cap is a concern for him in the future.
Explain the concept of ‘contributions splitting’ and how it could help Mr and Mrs Jones plan for the future.
Nicholas pays tax at a marginal tax rate (MTR) of 37% plus the Medicare Levy of 2%. What is the benefit of receiving fully franked dividends in his SMSF compared with receiving fully franked dividends in his own personal name?