Thinking of rolling your SMSF balance into an industry super fund?
Unlike an industry or retail super fund, a self-managed super fund (SMSF) is run privately. The members (typically a married couple) are responsible for the operation and investments made by the fund. Over time a member’s financial goals and their desired level of involvement in investment management may change. Transferring super back to an industry fund can provide greater peace of mind.Differences between a SMSF and an industry super fund
Running an SMSF can incur a variety of fees and costs like yearly independent audits, valuations of the SMSF and legal fees.
In an industry fund, the costs of running the fund and operating its investments are often pooled and spread across all the members, this can result in a lower ‘per head’ cost.
In an industry super fund like UniSuper, you’re able to take advantage of our investment experts. We manage around 70% of investments in-house, which helps to keep fees competitive. Complying with investment regulations lies with the industry fund, while in a SMSF, this responsibility lies with the trustee.
There may be more investment customisation available within 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 SMSFs. This includes certain infrastructure, private equity and unlisted assets.
The SMSF trustees/members must obtain, receive approval for, and pay for insurance to have it through the SMSF. The expenses associated with insurance are the responsibility of the SMSF trustee and members.
You can gain access to insurance through a group life policy in an industry fund, often without having to provide health evidence to the insurer. Industry fund professionals handle the management and administration of the policy which can bring about increased peace of mind.
Common reasons for rolling a SMSF balance over to an industry super fund
Burden of SMSF administration
Divorce or separation
Passing of a trustee
SMSF fees and costs
A step-by-step guide to winding up your SMSF
Consider obtaining advice before beginning the SMSF winding up process. The process can be complicated and may vary depending on your particular SMSF circumstances.
-
1 – Get a written agreement to wind up from all the trustees/members
SMSF members will need to follow the SMSF trust deed (or 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 in writing.
-
2 – Deal with the SMSF’s assets
Before closing the SMSF, the trustees will need to determine what to do with the member benefits—winding up the SMSF can generally only happen when it has zero funds. This could include paying out benefits to SMSF members if they’ve met a condition of release, or rolling their interest to another super fund. The SMSF’s liabilities will also need to be accounted for, like tax.
-
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 income streams. PAYG payment summaries might also be needed if benefits have been paid to SMSF members or a lump sum payment to a deceased estate. -
4 – Calculate and distribute money to members
Determine the funds SMSF members are entitled to receive and distribute them in accordance with law. -
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. -
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. You should contact the super fund for important details to complete the SMSF rollover.
-
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.
Speak to one of our award-winning financial advisers today
FAQs about winding up an SMSF
-
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.
-
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.
-
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.
-
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.
-
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.