Superannuation and SMSFs Quiz

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What is the primary role of the ATO in relation to SMSFs?

To audit the performance of large superannuation entities.

To provide financial advice to super fund members.

To regulate investments made by the trustees of super funds.

To protect the integrity of the superannuation system. (correct)

Which of the following is NOT a trustee duty in managing a super fund?

Avoid conflicts of interest.

Act impartially towards all beneficiaries.

Act in the best interest of the beneficiaries.

Delegate investment decisions to external advisors. (correct)

Under what legal framework must a super fund be established?

As a trust under the SIS Act. (correct)

As a partnership under the Partnership Act.

As a sole trader under the Business Act.

As a corporation under the Company Act.

Which of these statements regarding a Super Fund Trust Deed is correct?

It governs internal rules and external dealings. Signup and view all the answers

What is the current ratio of working-age individuals to those over 65 years old?

5 to 1 Signup and view all the answers

What is a key characteristic of the legal ownership held by a trustee?

The trustee holds ownership without legal rights of use. Signup and view all the answers

What major problem has arisen concerning social security benefits?

They are becoming unsustainable due to decreasing government resources. Signup and view all the answers

What must a Super Fund Trust Deed specifically define?

The payment procedures and types of benefits. Signup and view all the answers

What was a primary objective of the Superannuation Guarantee Scheme?

To meet demographic and economic objectives. Signup and view all the answers

Which of the following is not a requirement for trustees when making investment decisions?

To seek advice for investments they understand fully. Signup and view all the answers

What is a potential consequence of the declining proportion of working-age individuals?

Increased tax burden on future generations. Signup and view all the answers

Which regulatory body deals primarily with hundreds of medium to large entities as opposed to individuals?

APRA. Signup and view all the answers

What effect does the Superannuation Guarantee Scheme have on national savings?

It significantly raises national savings. Signup and view all the answers

What financial source does the compulsory savings from the Superannuation Guarantee directly contribute to?

Investment funds for economic growth. Signup and view all the answers

How has the introduction of the Superannuation Guarantee Scheme affected the liquidity in financial markets?

It has provided significant liquidity to markets like ASX. Signup and view all the answers

What is one risk retirees face regarding their pensions?

A lack of supplementary income sources. Signup and view all the answers

What is a characteristic of account-based RIS compared to fixed term and lifetime RIS?

They can be drawn down to zero quite quickly. Signup and view all the answers

What event automatically revokes a will?

Marriage Signup and view all the answers

What does effective estate planning primarily aim to ensure?

Assets are distributed in a tax-effective manner to the right beneficiary. Signup and view all the answers

What could be a potential downside of a non-account based RIS?

The income stream may stop after a predetermined period. Signup and view all the answers

What is NOT true about the powers of an executor?

An executor must be a family member Signup and view all the answers

Which of the following actions is most suitable for making simple amendments to a will?

Drafting a codicil Signup and view all the answers

What happens to the income tax treatment of pension withdrawals if the minimum drawdown is not met?

All pension withdrawals become taxable at the marginal tax rate. Signup and view all the answers

Under which circumstance would a will remain valid if it initially wasn't properly executed?

If a witness testifies to its intent Signup and view all the answers

Which of the following is considered a pro of having a non-account based RIS?

It provides a fixed entitlement to an income stream. Signup and view all the answers

What is a common issue to consider when distributing assets to beneficiaries?

Their eligibility for age pension Signup and view all the answers

At what age is the preservation for retirement typically recognized?

65 years old. Signup and view all the answers

Which of the following best summarizes longevity risk in the context of annuities?

The risk of outliving the income provided by the annuity. Signup and view all the answers

What could be a potential issue with appointing a family member as an executor?

Possibility of conflicting interests Signup and view all the answers

Which of the following beneficiaries can be legitimately included in a will?

A charity Signup and view all the answers

What must be taken into account in effective estate planning regarding beneficiaries?

The beneficiaries' circumstances and needs. Signup and view all the answers

In terms of changes made to a will, what does not constitute voluntary revocation?

Creating a codicil Signup and view all the answers

What is one requirement for a valid will regarding the witnesses?

The witnesses must be present when the will is signed. Signup and view all the answers

Which of the following is NOT considered a non-estate asset?

Personal property owned solely by the testator. Signup and view all the answers

Which test is NOT part of determining testamentary capacity?

Is the testator under any form of guardianship? Signup and view all the answers

What is the primary duty of a testaor’s executor?

To locate and prove the will. Signup and view all the answers

What age must a person be to legally make a will without restrictions?

18 years old. Signup and view all the answers

In what scenario would a superannuation nomination lapse?

If it is not renewed every three years. Signup and view all the answers

Which of the following conditions would invalidate a will?

The will is not signed by the testator. Signup and view all the answers

What typically happens to life insurance policies upon the death of the policyholder?

They are paid directly to the nominated beneficiaries. Signup and view all the answers