Ch.16 - 2011 LexisNexis Australia 1 Financial Planning in...

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Unformatted text preview: 2011 LexisNexis Australia 1 Financial Planning in Australia 4ed by Taylor, Juchau, Houterman Solutions by Graeme Colley Chapter 16 SUPERANNUATION AND RETIREMENT Solutions to Questions Question 1: What is the role of a financial planner for retirement planning? The role of a financial planner in retirement planning is to determine a clients needs to meet living expenses during retirement and those of any dependants in the event of the clients death. Once this has been decided the financial planner has the job of working out whether a clients investments including superannuation will be sufficient to meet those retirement objectives. Question 2: Describe the three pillar model which was published by the World Bank in Averting the Old Age Crisis and comment on how Australias retirement income system is regarded for each of the pillars. The three pillars or benchmarks of an economys progress towards a sustainable retirement income system are: A tax-funded Age Pension system provided by the state from general revenue which is basically regarded as a safety net; An occupationally based contribution system; and Personal retirement savings to supplement the other systems. The Australian system is considered to be unduly complex and lacking clarity from a policy and systems approach. The complexity is evident in the legislation applying to superannuation in Australia. However, during the last 15 years Australia has gone some of the way to reduce the complexity in the legislation governing superannuation contributions and benefit payments. 2011 Reed International Books Australia Pty Limited trading as LexisNexis. Permission to download and make copies for classroom use is granted. Reproducing or distributing any material from this website for any other purpose requires written permission from the Publisher. 2010 Reed International Books Australia Pty Limited trading as LexisNexis. Ancillary for Financial Planning in Sustralia 4ed - Taylor, Juchau, Houterman 2011 LexisNexis Australia 2 Question 3: Describe the regulatory environment for superannuation and the role of each regulator of superannuation funds. Basically, there are three regulators that supervise the operation of superannuation funds. The regulators are the Australian Prudential Regulatory Authority (APRA), the Australian Taxation Office (ATO) and the Australian Securities and Investments Commission (ASIC). APRA is responsible for the prudential supervision of superannuation except for self- managed funds, which are the responsibility of the ATO. Its role is to ensure that fund trustees manage the superannuation fund money properly and ensure they are acting in the long-term interests of members so the money is used for genuine retirement purposes....
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This note was uploaded on 01/10/2012 for the course FINS 3616 taught by Professor Curry during the Three '10 term at University of New South Wales.

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Ch.16 - 2011 LexisNexis Australia 1 Financial Planning in...

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