Superannuation and Retirement Applications (SRA) cheat sheet

Three-pillar structure: (1) compulsory employer contributions to accumulation funds, (2) voluntary salary sacrifice and personal contributions, (3) government-funded age pension as a safety net.

The Superannuation Guarantee (SG) rate is legislated to reach 12% of ordinary time earnings from 1 July 2025; the rate applies to eligible employees aged 18-74, with a monthly earnings threshold ($450 before 1 July 2022) removed so low earners accrue SG.

A superannuation fund must be a complying fund to receive concessional tax treatment; non-complying funds are taxed at 45% on taxable contributions and earnings.

APRA regulates prudential standards for APRA-regulated funds (RSE licensees); ASIC regulates conduct and disclosure; the ATO administers the SG, contribution caps, and self-managed funds.

Preservation rules: preserved benefits cannot be accessed before preservation age (60 for those born from 1 July 1964, tapering down to 55 for those born before 1 July 1960) except on retirement, disability, or terminal illness.

SMSF rules: maximum four members, trustees must be members (corporate trustee directors must be members), investment strategy must be documented, and in-house asset limit is 5% of fund assets.

MySuper is the default product standard for APRA funds, requiring a single diversified investment strategy, simple fees, and a lifecycle approach for members without an investment choice.

Trustee duties include acting in members' best interests, managing conflicts, maintaining an investment strategy, and reporting to APRA; breach reporting obligations apply to significant contraventions.

Concessional contribution cap: $30,000 per year (indexed) for 2024-25; includes employer SG, salary sacrifice, and personal contributions claimed as a tax deduction.

Non-concessional cap: $120,000 per year (four times the concessional cap), subject to a total superannuation balance test - nil available once TSB reaches the general transfer balance cap ($1.9 million in 2024-25).

Carry-forward rule: unused concessional cap amounts from up to five prior years can be used if total superannuation balance is below $500,000 at the prior 30 June.

Bring-forward rule: allows up to three years of non-concessional contributions ($360,000) in one year for members under 75, with the number of years available reduced as TSB approaches the cap.

Division 293 tax: an additional 15% tax on concessional contributions for individuals with income (including concessional contributions) above $250,000, making the effective rate 30%.

Contribution acceptance rules: contributions cannot be accepted once a member reaches 75 (except mandated SG and downsizer contributions); personal deductible contributions require a valid notice of intent before lodgement of the return.

Downsizer contributions: up to $300,000 per person from the sale of a main residence held for at least 10 years, available from age 55, not counted against contribution caps.

Earnings in accumulation phase are taxed at 15%; capital gains on assets held over 12 months are taxed at 10% effective; the fund pays tax on contributions and earnings, not the member directly.

Account-based pensions are the most common retirement income stream; they have no maximum drawdown but minimum annual payments based on age: 4% at 55-64, 5% at 65-74, 6% at 75-79, 7% at 80-84, 9% at 85-89, 11% at 90-94, 14% at 95+.

Minimum pension payments are calculated on the account balance at 1 July each year (or the commencement date for new pensions) and must be paid by 30 June; failure to meet the minimum results in the pension being treated as not in retirement phase for that year.

Transition to retirement (TTR) income streams: earnings taxed at 15% (not exempt) and no lump-sum access; since 1 July 2017, TTR pensions do not receive the earnings tax exemption.

Retirement phase earnings are exempt from tax (up to the transfer balance cap); the transfer balance cap is $1.9 million for 2024-25 and is indexed in $100,000 increments.

A lifetime annuity or defined benefit pension provides guaranteed income for life; a term annuity provides income for a fixed term; both may be purchased with superannuation money and receive tax concessions.

Payment standards: a retirement phase income stream must pay at least annually, be non-commutable (except for certain conditions), and be payable for life or a fixed term.

Commutation: lump sums can be taken from an account-based pension at any time; from a TTR pension, commutation is restricted to the preservation age and limited circumstances.

Reversionary pensions: a reversionary beneficiary receives the pension automatically on the member's death; a non-reversionary pension requires the trustee to pay a death benefit to dependants or the estate.

Contributions tax: 15% on concessional contributions; 30% for high-income earners under Division 293; non-concessional contributions are not taxed on entry.

Earnings tax: 15% in accumulation phase; 0% in retirement phase (up to the transfer balance cap); capital gains tax discount of one-third applies to assets held over 12 months (10% effective rate).

Lump sum tax: tax-free from age 60; between preservation age and 60, the taxable component is taxed at 0% up to the low-rate cap ($235,000 in 2024-25) and 15% above; under preservation age, 20% plus Medicare levy.

Income stream tax: tax-free from age 60; between preservation age and 60, the taxable component is taxed at marginal rates with a 15% tax offset; under preservation age, marginal rates with no offset.

Tax-free component vs taxable component: the tax-free component is not taxed on payment; the taxable component is taxed at the applicable rate depending on age and benefit type.

Death benefits: paid to dependants (spouse, children under 18, financial dependants) are tax-free; paid to non-dependants, the taxable component is taxed at 15% (or 30% if the benefit includes untaxed source).

Superannuation death benefits paid to the estate are taxed as if paid to a non-dependant; a valid binding death benefit nomination ensures the intended recipient.

Transfer balance cap: excess amounts above the cap are subject to 15% tax on notional earnings, plus a 15% penalty on the excess; the cap is $1.9 million for 2024-25.

Age pension eligibility age is 67 for those born on or after 1 July 1952; the pension is means-tested by both an income test and an assets test, with the lower result determining the payment.

Income test: the free area is $204 per fortnight for singles and $360 for couples (combined); above this, the pension reduces by 50 cents per dollar for singles and 25 cents per dollar per person for couples.

Assets test: the free area is $314,000 for a single homeowner and $470,000 for a couple homeowner (2024-25); above this, the pension reduces by $3 per fortnight per $1,000 of assets.

Deeming rules: financial assets are deemed to earn 0.25% up to the threshold ($62,600 for singles, $104,000 for couples) and 2.25% above; actual income is not counted for deemed assets.

Superannuation in accumulation phase is generally not counted as an asset for the age pension until the member reaches age pension age; from that age, it is counted.

Account-based pensions are counted as assets (the account balance) and deemed income applies; the pension payments themselves are not counted as income.

The work bonus allows the first $300 per fortnight of employment income to be ignored for pensioners over age pension age, with an accruable credit up to $11,800.

Rent assistance is available to pensioners who rent privately; the maximum rate depends on rent paid and family situation, and is paid in addition to the pension.

The retirement planning process: establish goals, gather client data, identify issues, analyse strategies, develop recommendations, implement, and review - the financial planning practice model.

Sources of retirement income: age pension, superannuation pension, annuities, investments outside super, and employment income; a retirement income plan should model longevity, inflation, and sequencing risk.

Sequence-of-returns risk: poor returns early in retirement can permanently reduce the portfolio; strategies include a cash buffer, bucket approach, and flexible spending.

The safe withdrawal rate concept: a 4% initial withdrawal rate (inflation-adjusted) has historically sustained a 30-year retirement; Australian conditions and fees require individual modelling.

Contribution strategies: salary sacrifice, personal deductible contributions, spouse contributions (up to $3,000 with an $540 offset), and the government co-contribution (up to $500 for eligible low-income earners).

Withdrawal strategies: pension payments, lump sums, and recontribution strategies to manage tax and Centrelink; recontributing after age 60 can convert taxable to tax-free components.

Estate planning: binding death benefit nominations, reversionary pensions, and wills must align; superannuation does not automatically form part of the estate.

Advice documentation: a Statement of Advice must disclose the adviser's fees, associations, and the basis of advice; a Record of Advice is used for subsequent changes.

Best interests duty (s961B Corporations Act): advisers must act in the client's best interests, including identifying the client's objectives and financial situation and considering alternatives.

Disclosure obligations: Financial Services Guide (FSG) must be provided before advice; Statement of Advice (SOA) must be provided when personal advice is given; Product Disclosure Statement (PDS) for financial products.

Conflicts of interest: advisers must prioritise the client's interests, disclose conflicts, and not accept conflicted remuneration (banned for personal advice since 2013, with limited exceptions).

The Corporations Act s912A requires AFS licensees to ensure efficiency, honesty, and fairness; s1041A prohibits misleading or deceptive conduct.

Code of Ethics: the FASEA/ASIC Code of Ethics requires advisers to act with integrity, objectivity, confidentiality, competence, fairness, and professionalism, and to place the client's interests first.

Continuing professional development: advisers must complete 40 hours of CPD per year, including at least 5 hours in ethics and 5 hours in technical competence.

Breach reporting: AFS licensees must report significant breaches to ASIC within 30 days of becoming aware; reportable situations include breaches of core obligations.

Privacy and anti-money-laundering: the Privacy Act 1988 and AML/CTF Act 2006 require client identification, record-keeping, and reporting of suspicious matters.