FNSSMS603A - Apply legislative and operational requirements to advising in self-managed superannuation funds Competency Mapping Template
Unit of Competency Mapping – Information for Teachers/Assessors – Information for Learners
FNSSMS603A Mapping and Delivery Guide Apply legislative and operational requirements to advising in self-managed superannuation funds
Version 1.0 Issue Date: June 2024
Qualification
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Unit of Competency
FNSSMS603A - Apply legislative and operational requirements to advising in self-managed superannuation funds
Description
This unit covers the skills and knowledge required to apply legislative and operational requirements while providing advice to clients/trustees in self-managed superannuation funds. It encompasses applying legislative and operational requirements while providing advice to clients/trustees of self-managed superannuation funds.This unit is applicable to individuals working within enterprises and job roles subject to licensing, legislative, regulatory or certification requirements including legislation administered by the Australian Securities and Investments Commission (ASIC).
Employability Skills
This unit contains employability skills.
Learning Outcomes and Application
This unit applies to the role of an adviser of a self-managed superannuation fund and is limited by whether or not they are a registered tax agent.
Duration and Setting
X weeks, nominally xx hours, delivered in a classroom/online/blended learning setting.
Prerequisites/co-requisites
FNSSMS602A
Apply taxation requirements when advising in self-managed superannuation funds
Competency Field
Development and validation strategy and guide for assessors and learners
Student Learning Resources
Handouts Activities
Slides PPT
Assessment 1
Assessment 2
Assessment 3
Assessment 4
Elements of Competency
Performance Criteria
Element: Establish knowledge of client/trustee regarding self-managed superannuation funds
Key features, structures and operations of a self-managed superannuation fund are explained to the client/trustee
Client/trustee is informed of the importance of receiving complete advice on taxation requirements and implications for the fund and adviser explains the scope and authority of taxation information they are able to provide
Sources of taxation information appropriate to self-managed superannuation funds and appropriate providers/referrals for this specialist advice are identified
Client/trustee is informed of the roles played by the adviser, intermediaries and issuers
Client/trustee is informed of the process to appoint trustees and trustee duties and responsibilities and liabilities are explained
Client/trustee is informed of the key issues that are considered when evaluating self-managed superannuation fund applications
Key features, characteristics and risks of different types of self-managed superannuation fund income streams are explained to client/trustee
Client/trustee is informed of the associated risks with establishing a self-managed superannuation fund
Client/trustee is informed of the steps required to establish a self-managed superannuation fund
The processes of winding up a self-managed superannuation fund benefits is explained to the client/trustee
Element: Identify and explain relevant fund legislative requirements to the client/trustee
Sources of legislative information appropriate to self-managed superannuation funds are identified
Legislative requirements that apply to client/trustee and self-managed superannuation fund structures are explained to the client/trustee
The client/trustee is informed of the role of the principal regulator in managing self-managed superannuation funds
The client/trustee is informed of the role of related regulators in managing, operating and supporting self-managed superannuation funds
The client/trustee is informed of the ongoing legislative requirements to maintain a compliant self-managed superannuation fund
The client/trustee is informed of the consequences of a self-managed superannuation fund becoming non-compliant
Element: Identify and explain relevant fund operational requirements to the client/trustee
Sources of operational information appropriate to self-managed superannuation funds are identified
Operational requirements that apply to the client/trustee of a self-managed superannuation fund structure are explained to the client/trustee
The client/trustee is informed regarding the operation of trust deeds and ongoing deed amendment and requirements
The client/trustee is informed of purposes of establishing life insurance through a self-managed superannuation fund
The client/trustee is informed of the requirements of establishing an investment strategy considering investment restrictions for a self-managed superannuation fund
The client/trustee is informed of the application of Superannuation Industry (Supervision) (SIS) preservation rules
Element: Identify and explain implications for contributions to the client/trustee
The client/trustee is informed of the types of allowable contributions that the self-managed superannuation fund can claim, within the scope of its authority
Regulations regarding a person's eligibility to contribute to a self-managed superannuation fund are explained to the client/trustee
The treatment of business real property is explained to the client/trustee
self-managed superannuation fund contribution rules, including in specie requirements are explained to the client/trustee
Allocation of contributions to individual member accounts is explained to the client/trustee
The client/trustee is advised to seek advice for higher level/specialist and/or comprehensive advice if required
Element: Identify and explain implications for fund income/assets to the client trustee
Scope of information on fund income and assets able to be provided are explained to the client/trustee
The importance of receiving complete advice on implications for fund income and assets and appropriate providers/referrals for this specialist advice are identified
Fund deductions available to self-managed superannuation funds are identified
Fund credits available to self-managed superannuation funds are identified
Impact of deductions on funds is explained to the client/trustee
Life insurance deductions are identified and explained to the client/trustee
In specie deductions are identified and explained to the client/trustee
Operation of fund reserves is explained to the client/trustee
Sole purpose test (appropriate/inappropriate self-managed superannuation fund investments) are explained to the client/trustee
Special self-managed superannuation fund investment strategies, including borrowing/lending restrictions, are explained to the client/trustee
The client/trustee is informed of the reporting issues regarding the treatment of franking credits (accumulation and pension)
The client/trustee is informed of implications and benefits relating to investment earnings (accumulation and pensions)
Element: Identify and explain implications for benefits to the client/trustee
The requirements for accessing assets in self-managed superannuation funds for the payments of benefits are explained to the client/trustee
Key features, characteristics and risks of different types of self-managed superannuation fund income streams are explained to the client/trustee
The process of setting up an income stream (i.e. pensions) from a self-managed superannuation fund is explained to the client/trustee
Calculation and operation of member accounts in both accumulation and pension phases are explained to the client/trustee
Treatments of lump sum Eligible Termination Payment (ETP) payments considerations are explained to the client/trustee
The client/trustee is advised of the superannuation surcharge considerations
The client/trustee is informed of the treatment of death benefits (lump sum and pension issues)
The client/trustee is informed of the different Reasonable Benefit Limit (RBL) treatments and reporting issues pertaining to self-managed superannuation funds
The client/trustee is advised to seek advice for higher level/specialist advice if required
Evidence Required
List the assessment methods to be used and the context and resources required for assessment. Copy and paste the relevant sections from the evidence guide below and then re-write these in plain English.
The Evidence Guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.
Overview of assessment
Critical aspects for assessment and evidence required to demonstrate competency in this unit
Evidence of the ability to:
interpret and apply SIS preservation rules, ATO guidelines and legislation
identify and explain relevant fund operational requirements and implication for contributions
identify and explain implications for fund income/assets and implications for benefits.
Context of and specific resources for assessment
Assessment must ensure:
competency is demonstrated in the context of the work environment and conditions specified in the range statement either in a relevant workplace or a closely simulated work environment
access to and the use of a range of common office equipment, technology, software and consumables
access to organisation financial records
access to organisational policies and procedures.
Method of assessment
A range of assessment methods should be used to assess practical skills and knowledge. The following examples, in combination, are appropriate for this unit:
evaluating an integrated activity, which combines the elements of competency for the unit, or a cluster of related units of competency
observing processes and procedures in workplaces
verbal or written questioning on underpinning knowledge and skills
evaluating samples of work
accessing and validating third party reports
setting and reviewing workplace business simulations or scenarios.
Guidance information for assessment
Submission Requirements
List each assessment task's title, type (eg project, observation/demonstration, essay, assignment, checklist) and due date here
Assessment task 1: [title] Due date:
(add new lines for each of the assessment tasks)
Assessment Tasks
Copy and paste from the following data to produce each assessment task. Write these in plain English and spell out how, when and where the task is to be carried out, under what conditions, and what resources are needed. Include guidelines about how well the candidate has to perform a task for it to be judged satisfactory.
Required skills
highly developed communication skills to:
liaise with others, share information, using questioning and active listening as required
describe taxation concepts and consequences to clients in plain, clear terms
use a range of interpersonal and communication skills to relate to a range of clients
use language and concepts appropriate to cultural differences
well-developed numeracy and IT skills to:
utilise computers and a range of computer software systems
perform basic calculations related to superannuation funds
access and update account records electronically
access and use appropriate software such as word processors, spreadsheets and databases
use internet information
highly developed literacy skills to read and interpret documentation from a variety of sources and record and consolidate related information
organisational skills, including the ability to plan and sequence work
ability to research and comprehend self-managed superannuation fund operational guidelines
research and analysis for:
accessing, interpreting and managing complex information
researching and comprehending self-managed superannuation fund legislation
identifying relevant legislation and regulations relevant to each client
assessing the accuracy and relevance of information
self-management skills for complying with ethical, legal and procedural requirements
learning skills to maintain knowledge of changes to relevant legislation and requirements
problem solving skills to address compliance and related issues
judgement skills for forming recommendations in operational situations
management skills for working effectively in a constantly changing environment
Required knowledge
application of Superannuation Industry (Supervision) (SIS) preservation rules
allocation of contributions to individual member accounts
basic features, structure and operation of self-managed superannuation funds
calculations and operation of member accounts in both accumulation and pension phases
establishing:
life insurance through a self-managed superannuation fund
the investment strategy for a self-managed superannuation fund
fund reserves and how to access self-managed superannuation funds and benefit payments issues
key features, characteristics and risks of different types of self-managed superannuation fund income streams
key issues to consider when evaluating self-managed superannuation funds
legislative requirements to maintain a self-managed superannuation fund
operations of trust deed and ongoing deed amendments
self-managed superannuation contribution rules, including in specie requirements
setting up an income stream (i.e. pension) from a self-managed superannuation fund (complying and non complying)
special self-managed superannuation fund investment strategies, including borrowing/lending restrictions
sole purpose test (appropriate and inappropriate self-managed superannuation fund investments)
steps required to establish a self-managed superannuation fund
treatment of business real estate property
winding up a self-managed superannuation fund/transfer of benefits
The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.
Trustee duties and responsibilities may include:
corporate duties as a director of a superannuation fund
managing assets of the trust
SIS compliance
SIS covenant duties and responsibilities
trust law duties and responsibilities
trustee liabilities.
Key issues in evaluating self-managed Superannuation applications, include:
adequacy of initial funds to set up self-managed superannuation fund
business acumen skills
estate planning
retirement planning
role of the adviser
taxation implications
trusteeship legal requirements.
Associated risks may include:
becoming non-compliant
investment risk
legislative risk.
Sources of information may include:
Australian Securities and Investments Commission (ASIC)
Australian Taxation Office (ATO)
courts
dealers
existing or proposed trust deeds
fund managers
industry bodies
legislation
licensees
professional associations
regulation
relevant Commonwealth, State and Territory government organisations
self-managed superannuation fund specialists.
Legislation may include, as amended:
anti-discrimination legislation
Corporations Act
Family Law Legislation Amendment Superannuation Act
Financial Services Reform Act (FSRA)
Income Tax Assessment Act
industrial legislation
Insurance Act
Privacy Act
Retirement Savings Account Act
stamp duty legislation
Superannuation (Resolution of Complaints) Act
Superannuation (Unclaimed Moneys and Lost Members) Act
Superannuation Contributions Tax (Assessment and Collection) Act (surcharge)
Trustee Acts or Trust Acts in each State and Territory
other relevant State, Territory and Commonwealth legislation.
Regulator/s may include:
ASIC
ATO
Australian Prudential Regulatory Authority (APRA).
Consequences of becoming non-compliant may include:
criminal prosecution
loss of concessional taxation benefits
reduction of fund assets
SIS penalties.
Operational of trust deed may include:
categorisation of contributions
guidelines on empowering trustees to appoint services providers
guidelines on empowering trustees to invest in assets
guidelines on empowering trustees to make other payments
guidelines on how benefits are paid
guidelines on who can be members
rules regarding the appointment of trustees
rules to operate the trust.
Investment restrictions may include:
acquiring assets from 'related parties' of the fund
borrowing by superannuation funds
in-house assets
lending to members and their relatives
making and maintaining investment on an 'arms length' basis.
Allowable contributions may include:
age limitations on contributions
business real property
Capital Gains Tax (CGT) exempt contributions
child contributions
in specie contributions
mandated employer contributions
member contributions
member voluntary contributions
spouse contributions.
Deduction may include:
accountants' fees
auditors' fees
financial planning fees
insurance
investment manager fees
legal fees.
Credit may include:
foreign taxation credits
franking credits.
Income streams may include:
allocated pensions/allocated annuities
annuities
life expected/life time
non-complying income streams
pensions.
Copy and paste from the following performance criteria to create an observation checklist for each task. When you have finished writing your assessment tool every one of these must have been addressed, preferably several times in a variety of contexts. To ensure this occurs download the assessment matrix for the unit; enter each assessment task as a column header and place check marks against each performance criteria that task addresses.
Observation Checklist
Tasks to be observed according to workplace/college/TAFE policy and procedures, relevant legislation and Codes of Practice
Yes
No
Comments/feedback
Key features, structures and operations of a self-managed superannuation fund are explained to the client/trustee
Client/trustee is informed of the importance of receiving complete advice on taxation requirements and implications for the fund and adviser explains the scope and authority of taxation information they are able to provide
Sources of taxation information appropriate to self-managed superannuation funds and appropriate providers/referrals for this specialist advice are identified
Client/trustee is informed of the roles played by the adviser, intermediaries and issuers
Client/trustee is informed of the process to appoint trustees and trustee duties and responsibilities and liabilities are explained
Client/trustee is informed of the key issues that are considered when evaluating self-managed superannuation fund applications
Key features, characteristics and risks of different types of self-managed superannuation fund income streams are explained to client/trustee
Client/trustee is informed of the associated risks with establishing a self-managed superannuation fund
Client/trustee is informed of the steps required to establish a self-managed superannuation fund
The processes of winding up a self-managed superannuation fund benefits is explained to the client/trustee
Sources of legislative information appropriate to self-managed superannuation funds are identified
Legislative requirements that apply to client/trustee and self-managed superannuation fund structures are explained to the client/trustee
The client/trustee is informed of the role of the principal regulator in managing self-managed superannuation funds
The client/trustee is informed of the role of related regulators in managing, operating and supporting self-managed superannuation funds
The client/trustee is informed of the ongoing legislative requirements to maintain a compliant self-managed superannuation fund
The client/trustee is informed of the consequences of a self-managed superannuation fund becoming non-compliant
Sources of operational information appropriate to self-managed superannuation funds are identified
Operational requirements that apply to the client/trustee of a self-managed superannuation fund structure are explained to the client/trustee
The client/trustee is informed regarding the operation of trust deeds and ongoing deed amendment and requirements
The client/trustee is informed of purposes of establishing life insurance through a self-managed superannuation fund
The client/trustee is informed of the requirements of establishing an investment strategy considering investment restrictions for a self-managed superannuation fund
The client/trustee is informed of the application of Superannuation Industry (Supervision) (SIS) preservation rules
The client/trustee is informed of the types of allowable contributions that the self-managed superannuation fund can claim, within the scope of its authority
Regulations regarding a person's eligibility to contribute to a self-managed superannuation fund are explained to the client/trustee
The treatment of business real property is explained to the client/trustee
self-managed superannuation fund contribution rules, including in specie requirements are explained to the client/trustee
Allocation of contributions to individual member accounts is explained to the client/trustee
The client/trustee is advised to seek advice for higher level/specialist and/or comprehensive advice if required
Scope of information on fund income and assets able to be provided are explained to the client/trustee
The importance of receiving complete advice on implications for fund income and assets and appropriate providers/referrals for this specialist advice are identified
Fund deductions available to self-managed superannuation funds are identified
Fund credits available to self-managed superannuation funds are identified
Impact of deductions on funds is explained to the client/trustee
Life insurance deductions are identified and explained to the client/trustee
In specie deductions are identified and explained to the client/trustee
Operation of fund reserves is explained to the client/trustee
Sole purpose test (appropriate/inappropriate self-managed superannuation fund investments) are explained to the client/trustee
Special self-managed superannuation fund investment strategies, including borrowing/lending restrictions, are explained to the client/trustee
The client/trustee is informed of the reporting issues regarding the treatment of franking credits (accumulation and pension)
The client/trustee is informed of implications and benefits relating to investment earnings (accumulation and pensions)
The requirements for accessing assets in self-managed superannuation funds for the payments of benefits are explained to the client/trustee
Key features, characteristics and risks of different types of self-managed superannuation fund income streams are explained to the client/trustee
The process of setting up an income stream (i.e. pensions) from a self-managed superannuation fund is explained to the client/trustee
Calculation and operation of member accounts in both accumulation and pension phases are explained to the client/trustee
Treatments of lump sum Eligible Termination Payment (ETP) payments considerations are explained to the client/trustee
The client/trustee is advised of the superannuation surcharge considerations
The client/trustee is informed of the treatment of death benefits (lump sum and pension issues)
The client/trustee is informed of the different Reasonable Benefit Limit (RBL) treatments and reporting issues pertaining to self-managed superannuation funds
The client/trustee is advised to seek advice for higher level/specialist advice if required
Forms
Assessment Cover Sheet
FNSSMS603A - Apply legislative and operational requirements to advising in self-managed superannuation funds
Assessment task 1: [title]
Student name:
Student ID:
I declare that the assessment tasks submitted for this unit are my own work.
Student signature:
Result: Competent Not yet competent
Feedback to student
Assessor name:
Signature:
Date:
Assessment Record Sheet
FNSSMS603A - Apply legislative and operational requirements to advising in self-managed superannuation funds
Student name:
Student ID:
Assessment task 1: [title] Result: Competent Not yet competent
(add lines for each task)
Feedback to student:
Overall assessment result: Competent Not yet competent