Whether you’re wanting to cut back on life admin or let someone else worry about the investing for a change, there are plenty of reasons to roll an SMSF into an industry super fund.
Luckily, we’ve made it as simple as it can be – here is a handy guide right here for you.
Why do people roll their SMSF into an industry super fund?
Life happens. And where you were at when you first opened your SMSF might be different from today. Here are the key reasons we’ve picked up on for closing an SMSF:
The work involved in running an SMSF. It can take a significant amount of time and energy to run and maintain your SMSF.
Divorce or a separation. Rolling the SMSF into an industry super fund can be a suitable option during a divorce.
A trustee passes away. That can lead to a big change for the remaining members of an SMSF, and they may want to switch to a super fund.
Fees and costs. Sometimes, switching to an industry super fund can reduce fees thanks to economies of scale.
Keep in mind too, that you can roll into any large, regulated super fund – not just industry funds.
Why not have both an Industry Super Fund and an SMSF?
Having SMSF and an industry super fund might sound like it gives you the best of both worlds. But there are pros and cons to having two funds running at the same time.
For example, you may end up paying fees on both funds, instead of one or the other – which could cost more over time.
If you’re unsure, chat to a licensed financial adviser. They’ll talk you through the pros and cons of each option and share guidance on your next best steps.
How to roll over your SMSF to an industry super fund
1. Get written agreement from your trustees
If you want to roll over your SMSF to an industry super fund, check your SMSF’s rulebook (called a trust deed) and make sure all trustees agree in writing to close the fund. Retain this agreement for your records – it’s a legal requirement. If you’re the only trustee of the SMSF, this agreement may not be necessary.
You and the trustees all need to agree on a few things. First, to roll over to an industry super fund and second, which fund each trustee would like to go with, and lastly what you’ll do with the assets.
Take detailed minutes of the meeting, listing attendees and next steps.
2. Deal with the SMSFs assets
An SMSF can generally only be wound up once it has zero funds, so you’ll need to get to this before closing the fund. If an SMSF member has met a condition of release, you may pay them out their benefits or roll their interest into another super fund. You’ll also need to account for the SMSFs liabilities. If an SMSF member hasn’t reached the right age or event to take their super out, their benefits can’t be paid out and must be rolled into another super fund.
3. Submit your outstanding reports
Make sure you finish them before you submit them. But anything that’s outstanding will need to be completed and sent to the ATO.
4. Transfer the funds to the fund's members
Figure out the funds your SMSF’s members are entitled to, then transfer them in accordance with the law. Be sure to double-check your maths.
5. Book an audit
You’re getting close to the end now. You’ll need to have an approved SMSF auditor complete the final audit of the fund. Be sure to confirm that all outstanding annual returns have been completed during this step.
6. Lodge your final return
Make sure all tax returns are lodged and the final audit is completed. Wait for the ATO to confirm your SMSF is closed before you close the bank account. Then toast to your success. Your last ever SMSF return has been done.
7. Transfer your super to your selected fund
This is the point where you can open an account with your nominated fund, then use SuperStream to rollover your balance from your SMSF. Completing an SMSF rollover with Rest? Here are the important steps.
A note on the ATO's SuperStream platform.
You'll need to already have (or create) a SuperStream compliant account to rollover your SMSF. For this, you'll need:
to make sure your SMSF's bank account details are correct with the ATO
Don't know these numbers? Talk to your financial advisor, tax agent, or the messaging provider who set it up for you.
8. Make sure everyone's aware and close your account
Let anyone who places money into the fund know that it’s being wound up. This includes employers, SMSF professionals and anyone else who might put money in. Ensure you’ve given your new super fund the required details so your super guarantee contributions go to the right place.
After the ATO confirms the fund’s ABN is cancelled, close the SMSF bank account, and make sure all financial business related to the SMSF has been transferred accordingly.
A few last things to do before a balance rollover
Before you go ahead and rollover your balance, it helps to be aware of the specific requirements you need to meet before doing so.
The biggest thing? All your assets need to be in cash before rolling over. Sell all your SMSF investments so the money is in cash before rolling it to a super fund – that’s the standard rule for rollovers.
Another important consideration is selling investments and moving money can create tax bills. Get advice on the tax and timing so you don’t get caught out.
There are more requirements for you to get across. Luckily, the ATO has a handy list that you can read to learn more.
How long does it take to rollover from an SMSF to an industry super fund?
The whole process – selling assets, audits, tax returns – can take weeks or even months when you are transferring funds from your SMSF to another super fund. Once everything is finalised in your SMSF, and both your SMSF and new industry super fund have the all the required details, the funds usually move from one account to the other within 3 business days.
From start to finish, you can see that there’s a few steps that need to be taken. Because a lot of those things are out of our control – lining all the SMSF members’ calendars up for example, it’s not possible to provide a set timeline.
It's easy to join Rest
Rest makes it easy to open both super and pension accounts. In a few quick steps, you’ll be all set up:
Step 1: Open a Rest account
It won’t take more than a few minutes to fill out the forms, and you can do everything online here.
Once registered, you can log into MemberAccess and download our app to manage your account.
You’ll need our details when filling out any forms and setting up your Rest Account.
Using ATO online services. Make sure your details details match the details on your Rest account, and don’t forget to include your new Rest member number to help things go smoothly. If you need help, you can contact your Rest team here.
We’ll send you an email to confirm we’ve received your money and details — usually within 3 business days.
Opening a Rest Pension account
There’s a few more things we need to check when setting up a Rest Pension account. These include eligibility checks, consolidation and your own personal retirement.
*Before combining your super, consider if Rest is right for you. Check out the fees and costs of your other fund plus any benefits that would be lost, such as insurance cover. Make sure your other fund knows about any contributions you intend to claim a tax deduction for, before combining with Rest. If you have any questions, speak to a licensed financial adviser or visit the ASIC MoneySmart website for more information.
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Is Rest an APRA fund?
Yes! Rest is APRA-regulated, and we take our responsibilities to protect our Members' interests very seriously.
