FASEA Superannuation and Retirement Planning 1 — Questions and Answers
Question 1: Under Australia's superannuation system, what is the minimum Superannuation Guarantee (SG) contribution rate that employers must pay for eligible employees as of 1 July 2025?
- 10.5%
- 11.0%
- 11.5% (Correct answer)
- 12.0%
Correct answer: 11.5%
The SG rate increased to 11.5% on 1 July 2024 and was set to reach 12% by 1 July 2025, but as of the 2024–25 financial year the legislated rate is 11.5%.
Question 2: Which of the following conditions must be met for a person to satisfy the 'retirement' condition of release for their superannuation benefits before age 60?
- They must be aged 55 or over and intend not to work more than 10 hours per week
- They must have reached preservation age and intend to never again become gainfully employed
- They must reach preservation age and satisfy a trustee that they have permanently retired (Correct answer)
- They must be aged 60 and have ceased an employment arrangement
Correct answer: They must reach preservation age and satisfy a trustee that they have permanently retired
Before age 60, a member must reach their preservation age AND satisfy the fund trustee that they have permanently retired from the workforce.
Question 3: A client born after 30 June 1964 wants to access their preserved superannuation. What is their preservation age?
- 55
- 57 (Correct answer)
- 60
- 65
Correct answer: 57
Members born after 30 June 1964 have a preservation age of 57 under current superannuation legislation.
Question 4: What is the annual concessional contributions cap for superannuation in the 2024–25 financial year?
- $25,000
- $27,500
- $30,000 (Correct answer)
- $35,000
Correct answer: $30,000
The concessional contributions cap increased to $30,000 per annum from 1 July 2024.
Question 5: Under the transfer balance cap rules, what happens when a member's transfer balance account exceeds the general transfer balance cap?
- The excess is automatically returned to accumulation phase
- The ATO issues a default assessment and the trustee must commute the excess
- The member must pay a 15% excess transfer balance tax and commute the excess (Correct answer)
- The excess is taxed at the member's marginal tax rate upon withdrawal
Correct answer: The member must pay a 15% excess transfer balance tax and commute the excess
When the transfer balance cap is breached, the ATO issues an excess transfer balance determination and applies an excess transfer balance tax (15% on the first breach, 30% subsequently) while the member must commute the excess back to accumulation.
Question 6: A financial adviser recommends a client consolidate their multiple superannuation accounts. Which FASEA Code of Ethics value is MOST directly served by this recommendation, if it genuinely reduces fees?
- Honesty
- Fairness
- Client's best interests (Correct answer)
- Diligence
Correct answer: Client's best interests
Acting in the client's best interests is directly served when consolidation objectively reduces fees and improves the client's financial position.
Question 7: Which superannuation structure allows members to borrow money to purchase assets inside the fund under a limited recourse borrowing arrangement (LRBA)?
- Industry superannuation fund
- Retail superannuation fund
- Self-managed superannuation fund (SMSF) (Correct answer)
- Corporate superannuation fund
Correct answer: Self-managed superannuation fund (SMSF)
Only SMSFs are permitted to enter into LRBAs under section 67A of the Superannuation Industry (Supervision) Act 1993.
FASEA Superannuation and Retirement Planning 1
Under Australia's superannuation system, what is the minimum Superannuation Guarantee (SG) contribution rate that employers must pay for eligible employees as of 1 July 2025?