Self-Managed Super Funds (SMSFs) provide Australians with greater control over their retirement savings. However, circumstances can arise where you may need to rollover your SMSF to another provider. In this article, we’ll discuss how to rollover your SMSF, the risks, costs, benefits, and negatives associated with the process.
Understand your reasons for rolling over: Before rolling over your SMSF, it’s crucial to understand why you want to do so. Some of the reasons may include lower fees, better investment options, improved service, or simply consolidating your superannuation. Whatever the reason, make sure you understand the benefits and risks of rolling over your SMSF.
Compare the options: Once you have decided to rollover your SMSF, the next step is to compare the available options. Research other superannuation providers and compare their fees, investment options, insurance coverage, and services. Make sure you understand the fees and charges associated with each provider, including any exit fees or penalties.
Check the compliance status: Before rolling over your SMSF, check the compliance status of the receiving fund. The Australian Taxation Office (ATO) provides an online tool, Super Fund Lookup, which allows you to check the compliance status of any super fund. Ensure the receiving fund is a complying fund before proceeding with the rollover.
Initiate the rollover: Once you have chosen a new provider, contact them to initiate the rollover process. The new provider will provide you with the necessary forms to complete, including a rollover initiation request form. You will need to provide your SMSF details, including the fund name, Australian Business Number (ABN), and account number.
Monitor the transfer: Once you have initiated the rollover, monitor the transfer process to ensure it goes smoothly. Check with both your SMSF and the new provider to confirm that the transfer has been completed. Keep records of all communication and documentation related to the rollover.
While rolling over your SMSF can have many benefits, there are also risks, costs, and negatives to consider.
Risks:
There are risks involved in rolling over your SMSF, such as potential loss of insurance coverage, additional fees, and the risk of being scammed. Make sure you understand the risks involved before proceeding with the rollover.
Costs:
There may be costs associated with rolling over your SMSF, including exit fees, establishment fees, and ongoing fees with the new provider. Ensure you understand the costs involved before proceeding with the rollover.
Benefits:
Rolling over your SMSF can have many benefits, such as lower fees, better investment options, and improved services. Ensure you understand the benefits of rolling over your SMSF before proceeding with the rollover.
Negatives:
There may be negatives associated with rolling over your SMSF, such as the loss of existing investments, the need to re-establish your fund, and potential delays in accessing your superannuation. Ensure you understand the negatives involved before proceeding with the rollover.
According to the ATO, “Before making any decisions about rolling over your SMSF, it’s important to do your research and understand the potential benefits, risks, costs, and negatives associated with the process.”
Rolling over your SMSF can be a complicated process, and it’s essential to understand the risks, costs, benefits, and negatives before proceeding. Make sure you understand your reasons for rolling over, compare your options, check the compliance status of the receiving fund, initiate the rollover, and monitor the transfer process. By doing so, you can ensure a smooth and successful rollover process.
References:
Australian Taxation Office. (2021). Rolling over and consolidating super. Retrieved from https://www.ato.gov.au/Individuals/Super/Super-changes/Rolling-over-and-consolidating-super/
Australian Securities and Investments Commission. (2021). Rollovers and transfers. Retrieved from https://www.moneysmart.gov.au/superannuation-and-retirement/how-super-works/choosing-a-super-fund/rollovers-and-transfers
SuperGuide. (2021). How to rollover your SMSF: The complete guide. Retrieved from https://www.superguide.com.au/smsfs/how-to-rollover-your-smsf
