A key part of the SMSF establishment process is rolling over your superannuation balance from your industry/ retail or employer sponsored fund to your Self Managed Superannuation Fund (“SMSF”). If performed incorrectly, this can become a frustrating and timely process.
A similar process is followed by most funds, which will include a rollover form, certified identification and a compliance letter. Absence of these documents and the rollover will most likely be declined.
The ATO SMSF rollover form can be found here. Note the form is the transfer of ‘whole balance’, which means this will rollover your entire SMSF balance. Therefore it is important to consider your insurance before you complete the rollover, as the transfer of whole balance will result in a loss of your insurance coverage.
Partial rollovers can be the most beneficial way for Trustees to retain the personal insurance coverage provided by their existing fund, until you are able to establish an SMSF Policy. Your fund may have a specific form for partial rollovers, otherwise prepare a cover letter detailing the rollover request specifying the amount of the rollover and the amount to remain in the fund. The remaining amount needs to meet the minimum balance of the fund to permit insurance coverage.
Causes for delays
Providing incorrect details or incomplete documentation can cause timely and costly delays. The key cause of delay is incorrect details being provided by the member. You must ensure the member details included on the Rollover Form match the fund records. Further, ensure you have provided appropriate certified proof of identity i.e. driver license/ passport as well as the Compliance Letter.
Steps to complete the Rollover
You will require an SMSF with an Australian Business Number and a bank account prior to processing your rollover. By following the steps below, you can ensure your rollover process is smooth with no surprises.
Steps to roll over your super:
- Set-up an SMSF with Redwood Advisory
- Redwood Advisory will apply for an ABN & TFN for your SMSF on your behalf upon establishing the fund.
- Once the SMSF ABN is received, establish a SMSF bank account
- Once bank account is established, you are then ready to roll over your super
- Complete a ‘Request to transfer whole balance of superannuation balance between funds form’
This form is easy to complete. In the ‘To’ field, you will need to complete the ‘fund name’, ‘fund phone number’ and ‘ABN’, you will also include the SMSF bank account details
- Ensure your details match your member statement
- Sign the document
- Ensure you include a certified proof of identity and attach a ‘certificate of compliance’
Please send the original form to the fund immediately to avoid delay and best practice will be to also email a scanned copy of the form.If possible, request the transfer to be completed by Electronic Funds Transfer as cheques will take up to 3 business days to clear. If the above steps are executed, the turnaround from the industry/ employer sponsored fund receiving the documentation is 5 business days.
Disclaimer – The content has been prepared without taking account of the objectives, financial situation or needs of a particular individual and does not constitute financial product advice.