Deck 21: Accounting for Superannuation Entities

Question 1

Explain the essential features of a defined benefit,externally managed,non-contributory superannuation plan whose benefits are not vested.

Answer 1

In the majority of cases,however,the trustees pass the management responsibilities to professionals,such as banks and life insurance companies.The external managers report to the trustees at regular intervals about the earnings performance of the externally managed superannuation plan,its assets and its future prospects.The trustees,of course,remain ultimately responsible for the plan.

Question 2

Individual financial statements provided by superannuation entities provide which of the following:

A) the amount payable now on the resignation of a member.
B) the average rate of return on current assets.
C) total employee contributions.
D) the amount payable when transferring a plan.

Answer 2

A

Question 3

AAS 25 applies specifically to superannuation plans and:

A) overrides the Australian equivalent to IFR's
B) requires the preparation of information about the rights and benefits of individual members
C) applies only to private sector superannuation plans
D) all of the above

Answer 3

A

Question 4

Superannuation-specific disclosures include which of the following?

A) disaggregated information when it is necessary to explain the risks and benefit arrangements relating to different categories of members
B) the main features of specific contractual or statutory arrangements in place between a superannuation entity and any relevant employer-sponsor(s)
C) qualitative and quantitative information that provides a basis for understanding the amount, timing and uncertainty of future cash flows relating to insurance liabilities and assets
D) all of the above

Question 5

The factors provided in paragraphs AG41 to AG42 to consider in determining whether a superannuation entity is acting as an agent to include which of the following:

A) members (or their beneficiaries) only receive insurance benefits if the external insurer/reinsurer pays claims
B) insurance premiums are only paid through the superannuation entity for administrative reasons
C) insurance premiums are effectively set directly by reference to premiums set by an external insurer.
D) all of the above

Question 6

The inclusion of a report of the trustees of a superannuation plan is:

A) required by AAS 25
B) the same as an actuarial report
C) recommended by the ASFA
D) not relevant for a self-managed plan

Question 7

The general purpose financial reports of a superannuation plan should provide information to assist in answering the following question:

A) Who are the trustees?
B) Is the plan solvent?
C) What are the names of the professional advisers?
D) None of the above

Question 8

Discuss some of the changes to MS Plan's Income Statement under the AASB 1056 requirements.

Question 9

For each reporting period,superannuation entities are required to prepare each of the following except

A) a statement of consolidated benefits.
B) income statements.
C) a statement of cash flows.
D) consolidated financial reports.

Question 10

A superannuation fund to which employees can make voluntary contributions so as to increase the value of their benefits is known as a/an:

A) defined contribution fund
B) defined benefit fund
C) externally managed fund
D) contributory fund

Question 11

Discuss the roles of APRA,Asic and the ATO in the regulation of the superannuation industry.

Question 12

Discuss some of the major differences between the requirements of AAS 25 and AASB 1056.

Question 13

The general purpose financial statements of a superannuation plan should answer the following question(s):

A) Is the plan solvent?
B) Will the plan remain solvent?
C) Are the trustees diligently performing their duties?
D) All of the above

Question 14

Generally,insurance arrangements include which of the following?

A) offered to members, with the entity only acting as an agent
B) offered to members, with the entity accepting insurance risk
C) provided to defined benefit members in relation to their projected retirement benefit
D) all of the above

Question 15

A member of a superannuation fund can leave the fund but retain a right to all accrued benefits in the case of a:

A) self-managed fund
B) vested benefits fund
C) contributory fund
D) all of the above

Question 16

In the notes section of a Future Annulation plan,insurance liabilities can do all of the following except that it

A) can elect to take out term life cover with FS Plan up to a maximum of $1.5 million per member
B) uses the services of an actuary to determine its insurance contract liabilities.
C) entity has reinsured all direct insurance risks with ABC Reinsurance (Australia)
D) all of the above

Question 17

The trustees of a superannuation fund can transfer their responsibility for the general conduct of the fund:

A) if it is non-contributory
B) if it provides portable benefits
C) if the fund is externally managed
D) in none of the above cases

Question 18

Australian Accounting Standard AAS 25 'Financial Reporting by Superannuation Plans' requires that,wherever possible,the amount recorded for accrued liabilities of a defined benefit superannuation plan:

A) include allocated and unallocated contributions
B) be measured in present value terms using a published discount rate
C) equal the assets of the plan less the sum of tax and sundry liabilities
D) be measured in present value terms using an appropriate, risk-adjusted discount rate