Thinking of rolling your SMSF balance into an industry super fund?
Differences between a SMSF and an industry super fund
Running a SMSF can incur a variety of fees and costs. These can include: yearly independent audits, valuations of the SMSF assets and legal fees (eg, if the fund deed needs amendments).
In an industry fund, the costs of running the fund and operating its investments are often pooled and spread across all the members, generally resulting in a lower ‘per head’ cost.
In an industry super fund you’re able to take advantage of the expertise of investment managers. Additionally, complying with investment regulations lies with the industry fund, in a SMSF this responsibility lies with the trustee/members.
There may be more investment options for an SMSF than an industry fund, however an industry fund can invest at scale and can access direct investments that may not be accessible to SMSF investors (such as certain infrastructure / private equity / unlisted assets).
To have insurance through your SMSF, the SMSF trustees/members must obtain, receive approval for, and pay for it. The expenses associated with insurance are the responsibility of the trustees/members of the fund.
In an industry fund you can gain access to insurance through a group life policy, often without having to go through personal underwriting. Professionals in the industry fund handle the management and admin of the policy as well, for increased peace of mind.
Common reasons for rolling a SMSF balance over to an industry super fund
Administrative burden
Divorce / Separation
Passing of a trustee
A step-by-step guide to winding up your SMSF
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Step 1 – Get a written agreement to wind up from all the trustees/members
The members of the SMSF will need to follow the procedure set out in the SMSF trust deed (and company constitution if the SMSF has a corporate trustee) for winding up the SMSF. This will include getting the members’ consent to wind up the SMSF and recording that resolution in writing. -
Step 2 – Deal with the SMSF’s assets
Before closing the SMSF, the trustees will need to determine what to do with the member benefits, as an SMSF can only be wound up when it has zero funds. This could include, for example, paying out benefits to members (if they have met a relevant condition of release) or rolling their interest to an industry super fund. Liabilities of the SMSF, such as tax, will also need to be accounted for. -
Step 3 – Complete and submit any outstanding reports
Make sure any outstanding reports are sent to the ATO. These include the transfer balance account report for a pension/income stream. PAYG payment summaries might also be needed if benefits have been paid to members or a lump sum payment to a deceased estate. -
Step 4 – Calculate and distribute money to members
Determine how much money each member of the SMSF is entitled to receive and distribute it accordingly. -
Step 5 - Book an audit with an approved auditor and lodge your final annual return
Before lodging your final return, have an approved SMSF auditor complete the final audit of the fund. Confirm that all outstanding annual returns have been completed during this step. -
Step 6 – Transfer your super to your selected fund
Open an account with your nominated super fund, then use SuperStream to rollover your balance from your SMSF. It’s also recommended you contact your super fund for the details to complete the SuperStream transfer. -
Step 7 – Update third parties about the winding up of the SMSF and close the SMSF’s bank account
Ensure employers who make contributions to the fund, SMSF professionals, and anyone else related to the fund is aware that the SMSF is being wound up. After the ATO confirms the fund’s ABN is cancelled, close the SMSF bank account, making sure that all financial business related to the SMSF have been transferred accordingly.
For more information about closing your SMSF, read the ATO’s page on winding up your SMSF.
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FAQS about SMSF rollover
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How much does it cost to manage a SMSF?Depending on the assets in the fund, as well as any professional financial and investment advice received by the trustees, the running costs can vary. These costs also include routine administration costs, such as the cost of an annual audit.
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How much does it cost to roll over my super to another super fund?There are no direct fees or costs associated with rolling over your super to another super fund. Any fees and charges come from services related to winding up your SMSF such as hiring an accredited auditor and selling assets.
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How long does it take to transfer from SMSF to an industry super fund?The length of time for transferring from an SMSF to an industry super fund varies depending on the variety of assets held in the SMSF.
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Can I have a SMSF and an industry super fund at the same time?Yes, you can have both a SMSF and an industry super fund at the same time, you don’t have to have one or the other. If you have both you’ll be paying fees on each so it may not be the best way to save for your retirement.
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Am I eligible to transfer from a SMSF to an industry super fund?Yes. Just remember that a rollover from an SMSF to an industry fund will need to be in cash, so any non-cash assets from the SMSF will need to be liquidated prior to the rollover. There may be costs associated with liquidation of these assets.