Monarch Learning Management System for SMSF Module 3 Workplace Simulation Submission

DFP+SMSF Module 3Wkplace Simulation1707
Units: FNSASICU503, FNSFPL502, FNSFPL503, FNSSMS501, FNSSMS505, FNSSMS601, FNSSMS602,
FNSSMS603
Diploma of Financial Planning + SMSF
Module 3 Workplace Simulation
Submission Instructions:
Key steps that must be followed:
 Please complete the Declaration of Authenticity at the bottom of this page.
 Once you have completed all parts of the assessment and saved it (e.g. to your
desktop computer), login to the Monarch Learning Management System (LMS) to
submit your assessment.
 In the LMS, click on the file ”Submit DFP+SMSF Module 3 workplace simulation” in the
Module 3 section of your course and upload your assessment file/s by following the
prompts.
 Please be sure to click “Continue” after clicking “submit”.This ensures your assessor
receives notification – very important!
Click here to go to the Monarch LMS
Declaration of Authenticity*
I certify that the attached material is my original work. No other person’s work hasbeen used without due
acknowledgement. I understandthat the work submitted may be reproduced and/or communicated for the purposeof
detecting plagiarism.
Student Name*: Date:
* I understand that by typing my name or inserting a digital signature into this box that I agree and am bound
by the above student declaration.

DFP+SMSF Module 3Wkplace Simulation1707
Units: FNSASICU503, FNSFPL502, FNSFPL503, FNSSMS501, FNSSMS505, FNSSMS601, FNSSMS602,
FNSSMS603
Important assessment information
Aims of this assessment
This assessment covers the fundamentals of superannuation. It covers spouse contribution rules
and strategies. It explores the making of non-concessional contribution strategies including
addressing the ‘bring-forward’ rule. The tax consequences on concessional and non-concessional
‘caps’ is explored, as are the tax consequences on superannuation contributions and withdrawals.
The differentiation between employer and membercontributions (i.e. different contribution types)
is explored. Transition-to-retirement strategies are covered as are the tax implications of taxable
versus tax-free superannuation benefits paid out to members or their beneficiaries. SMSF’s are
addressed in the context of using limited recourse borrowing arrangements. Bare Trusts are
explored as the holding mechanism for SMSF assets that are used as security in the borrowing
arrangement. The rules regarding business real property are explored in the context of making
concessional or non-concessional in-specie contributions into a SMSF. Rules on trusteeship of
SMSF’s are covered including differences between individual and corporate trustee arrangements.
Membership rules around an SMSF are covered including familial rules and employer/employee
rules. Rules on investment strategies within SMSF’s are explored. Death benefits paid from
SMSF’s are also addressed, including estate planning issues and re-contribution strategies.
Marking and feedback
This assignment contains 5 assessment activities each containing specific instructions.
This particular assessment forms part of your overall assessment for the following units of
competency:
 FNSASICU503
 FNSFPL502
 FNSFPL503
 FNSSMS501
 FNSSMS505
 FNSSMS601
 FNSSMS602
 FNSSMS603

DFP+SMSF Module 3Wkplace Simulation1707
Units: FNSASICU503, FNSFPL502, FNSFPL503, FNSSMS501, FNSSMS505, FNSSMS601, FNSSMS602,
FNSSMS603
Grading for this assessment will be deemed “competent” or “not-yet-competent” in line with
specified educational standards under the Australian Qualifications Framework.
What does “competent” mean?
These answers contain relevant and accurate information in response to the question/s with
limited serious errors in fact or application. If incorrect information is contained in an answer, it
must be fundamentally outweighed by the accurate information provided. This will be assessed
against a marking guide provided to assessors for their determination.
What does “not-yet-competent” mean?
This occurs when an assessment does not meet the marking guide standards provided to
assessors. These answers either do not address the question specifically, or are wrong from a
legislative perspective, or are incorrectly applied. Answers that omit to provide a response to any
significant issue (where multiple issues must be addressed in a question) may also be deemed
not-yet-competent. Answers that have faulty reasoning, a poor standard of expression or include
plagiarism may also be deemed not-yet-competent. Please note, additional information regarding
Monarch’s plagiarism policy is contained in the Student Information Guide which can be found
here: http://www.monarch.edu.au/student-info/
What happens if you are deemed not-yet-competent?
In the event you do not achieve competency by your assessor on this assessment, you will be
given one more opportunity to re-submit the assessment after consultation with your Trainer/
Assessor. You will know your assessment is deemed ‘not-yet-competent’ if your grade book in the
Monarch LMS says “NYC” after you have received an email from your assessor advising your
assessment has been graded.
Important: It is your responsibility to ensure your assessment resubmission addresses all areas
deemed unsatisfactory by your assessor. Please note, if you are still unsuccessful in meeting
competency after resubmitting your assessment, you will be required to repeat those units.
In the event that you have concerns about the assessment decision then you can refer to our
Complaints & Appeals process also contained within the Student Information Guide.
Expectations from your assessor when answering different types of assessment questions
Knowledge based questions:
A knowledge based question requires you to clearly identify and cover the key subject matter
areas raised in the question in full as part of the response.

DFP+SMSF Module 3Wkplace Simulation1707
Units: FNSASICU503, FNSFPL502, FNSFPL503, FNSSMS501, FNSSMS505, FNSSMS601, FNSSMS602,
FNSSMS603
Skill based questions:
Where you are asked to write as though you are speaking to a client, your answers must show
your ability to:
 understand your client’s concerns/perspective/views
 show empathy
 display a professional response
 explain ideas clearly and simply so your client can understand the issues
Good luck
Finally, good luck with your learning and assessments and remember your trainers are here to
assist you 

DFP+SMSF Module 3Wkplace Simulation1707
Units: FNSASICU503, FNSFPL502, FNSFPL503, FNSSMS501, FNSSMS505, FNSSMS601, FNSSMS602,
FNSSMS603
Activity instructions to candidates
 This is an open book assessment activity.
 You are required to read this assessment and answer all10 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: 1-2 hours
Assessment Activity 1
Technical Issues
Superannuation

DFP+SMSF Module 3Wkplace Simulation1707
Units: FNSASICU503, FNSFPL502, FNSFPL503, FNSSMS501, FNSSMS505, FNSSMS601, FNSSMS602,
FNSSMS603
Background
As an adviser it is important to be aware of all the amounts that are being contributed to your client's
superannuation fund/s. Getting this wrong can have a detrimental effect on your client's financial situation,
not to mention the extra paperwork and time that is required to rectify excess contributions.
Year 1 scenario
Jim is 62 years old and has been a client of yours for many years. Jim earns a salary of $100,000 plus
Superannuation Guarantee (SG) contributions. He also salary sacrifices into superannuation such that the
combination of his salary sacrifice contributions and his annual SG amount equals his current concessional
contributions cap. Jim has accrued a balance of $1.6 million in his accumulation account. Last year Jim's wife
Mandy, aged 60, ceased working in order to help look after their grandchildren. Mandy has a small
superannuation balance of just $60,000.
Jim is keen to grow his super balance as much as he can so that he can continue to provide support for Mandy
and himself when they retire.Jim has recently sold some shares so he now has an extra $200,000 which he
would like to use to increase his super balance.
Question 1.1
Based on 2017-18 rates, calculate Jim's annual Sperannuation Guarantee (SG) contribution. Please show your
workings.
Question 1.2
Based on 2017-18 rates, calculate Jim's salary sacrifice contribution for the 2017-18 year. Please show your
workings.
Superannuation Guarantee Contribution:
Annual Salary x 9.5% = $100000 x 9.5% = $9500
Salary Sacrifice Contribution:
Concessional Contribution Cap – Superannuation Guarantee Contribution
= $25000 - $9500
= $15500

DFP+SMSF Module 3Wkplace Simulation1707
Units: FNSASICU503, FNSFPL502, FNSFPL503, FNSSMS501, FNSSMS505, FNSSMS601, FNSSMS602,
FNSSMS603
Question 1.3
Is it possible for Jim to contribute the $200,000 into his super fund as a non-concessional contribution? Explain
your anwer.
Question 1.4
As Mandy is no longer working, is she permitted to make any further contributions into her super fund. Please
explain your answer.
Question 1.5
Jim's friend has been talking about contributions splitting and Jim has asked you if this issomething that he
could do. Discuss with Jim how much of his contributions could be split with his wife Mandy.
Question 1.6
If Jim gave his $200,000 to Mandy, would Mandy be able to contribute the $200,000 to her super fund as a
non-concessional contribution?
Explain your answer.
JIM cannot contribute to $200,000 in to his super fund as a non-concessional contribution due to
the fact that according to the new rules an individual with a balance of 1.6 million or more will no
longer be qualified to make non-concessional contributions.
Contribution splitting is possible among the couple and therefore the members are able to
transfer up to 85% of their salary sacrifice and deductible contributions. However one should
check with your fund if such an option is available and also confirm whether any fees and/or
deadlines apply
Mandy does not need to work in order to make super contributions, including non-concessional
contributions, as she is under the age of 65 years. It has been stated in the Australian Taxation
Office that one who Is not employed can make contributions in their super fund till they attain
the age of 65 years.

DFP+SMSF Module 3Wkplace Simulation1707
Units: FNSASICU503, FNSFPL502, FNSFPL503, FNSSMS501, FNSSMS505, FNSSMS601, FNSSMS602,
FNSSMS603
Year
2 scenario
In year 2 when Jim is 63, his father passed away leaving him an inheritance of $300,000.The share market
suffered some dramatic losses in June of the previous year and Jim's super account balance fell to $1.3 million
as at 30 June of the previous year. Jim is not concerned about the losses as he understands the volatile nature
of equities and his investments are still producing dividends.
Question 1.7
Is Jim able to contribute his $300,000 inheritance into his super fund? Explain your answer.
Question 1.8
As Jim is now 63 years old, he is considering retirement in about 12 months time and you have been discussing
the retirement income stream phase with him.
Explain to Jim how giving the $300,000 from his inheritance to Mandy to contribute to her super fund would
enable them, as a couple, to have a higher balance in the retirement income stream phase.
Mandy can contribute $200,000 to her super fund as a non-concessional contribution as she has a
lower balance of 1.6 million and therefore has the ability to contribute the to the maximum cap
limit.
He is able to contribute the same as it is seen that his balance has lowered down to 1.3 million
and as his age is 63 years, he can make contributions up to $540,000 according to the balance as
she has. Therefore, he can invest the inherited amount in the super fund.