FASEA Superannuation and Retirement Planning 3

Question 1

A client aged 75 receives an account-based pension. What is the minimum annual drawdown percentage they must withdraw?

Accepted Answer

5%

Answer

For members aged 75–79, the minimum annual pension drawdown factor is 6%; however for ages 70–74 it is 5%, so at exactly 75 it transitions to 6%.

Question 2

Which of the following best describes the 'total super balance' concept and its relevance to a client's superannuation strategy?

Accepted Answer

It is the sum of all superannuation interests and affects eligibility for non-concessional contributions and carry-forward concessional contributions

Answer

Total super balance (TSB) is the total of all superannuation interests at 30 June each year and affects the ability to make non-concessional contributions, use bring-forward, and access unused concessional cap carry-forward amounts.

Question 3

A 63-year-old client has permanently retired and commences an account-based pension. How are pension payments taxed in the hands of the client?

Accepted Answer

Tax-free because the client is over 60

Answer

Pension payments from a taxed superannuation fund are completely tax-free for members aged 60 and over.

Question 4

Under the downsizer contribution rules, which of the following clients is eligible to make a downsizer contribution?

Accepted Answer

A 55-year-old who sells their main residence held for 12 years

Answer

From 1 January 2023, eligible individuals aged 55 or over can make a downsizer contribution from the proceeds of selling a qualifying Australian residential property held for at least 10 years.

Question 5

When a financial adviser recommends an SMSF to a client, which of the following considerations is MOST critical from a best interests duty perspective?

Accepted Answer

Whether the SMSF's costs, control benefits, and investment options are appropriate for the client's specific circumstances and balance

Answer

Recommending an SMSF requires demonstrating that the structure's benefits (control, flexibility) outweigh its costs for the client's particular circumstances, including whether the balance is sufficient to justify the ongoing administration costs.

(FASEA) Financial Adviser Standards and Ethics Authority Practice Test

(FASEA) Financial Adviser Standards and Ethics Authority Practice Test

FASEA Superannuation and Retirement Planning 3