There’s a number of reasons why a superannuation rollover might be appropriate. You may want to reduce fees, get exposure to a different range of investment options or you could simply be consolidating a number of super funds into one account.
But, there’s some things to consider before starting the process of rolling over your superannuation.
What is a Superannuation Rollover?
A superannuation rollover is the act of transferring your super balance from one super fund to another.
In Australia, you are generally able to hold your superannuation with whichever super fund you like.
The superannuation rollover rules require your existing super fund to rollover your super balance to your preferred superannuation fund within a reasonable timeframe.
Generally, a super fund must sell your super investments within three-business days of receiving the rollover request and must process the rollover within three-business days of receiving the proceeds from the investment sale.
How to Rollover Super
There are four ways that you are able to rollover your super. These are as follows:
1. Contact Your Existing Super Fund
You can phone your current super fund and ask them to email you the required forms or instructions to rollover your super. Alternatively, you should be able to find the required forms on your super fund’s website. It could be called a withdrawal form, lump sum request form, rollover form or transfer form. You will need to complete the form with your current member details and the fund that you intend on transferring your super to.
2. Contact Your Proposed Super Fund
If you know which super fund you intend on transferring your super to, you can contact them and ask them for the process involved. Often, your preferred super fund will be more likely to assist in the rollover process than your existing fund, because it is in their best interest to get your superannuation across to their fund.
3. Contact Your Financial Adviser
If you have a financial adviser, you can contact them to notify them of your intention to rollover your super to a different fund. If you are paying your financial adviser an ongoing fee, they should assist you with your request at no cost. A financial adviser who does not charge you ongoing fees may charge a one-off administration fee.
Related Article: Do I Need a Financial Adviser to Manage My Super?
4. Use the Standard ATO Rollover Form
The Australian Tax Office (ATO) has a standard rollover form, which can be found here. However, it should be noted that this form can only be used if you intend on rolling over your total superannuation balance (i.e. not a partial rollover).
How Long Does a Super Rollover Take?
A super rollover usually takes around 2-3 weeks between when you submit your rollover form until your super balance is received and allocated to your member account. This super rollover time frame has become more standardised with the introduction of the 3-day rule, as noted above.
Risks of Rolling Over Your Super
There are several risks associated with rolling over your super that you should be aware of before submitting any instructions to rollover your super.
This video explains some of the main risks associated with rolling over your super.
In addition to the risks above, a simple mistake that many people make when rolling over their super is during the completion of the rollover form. It’s very important to double-check and proof-read any forms that you complete, in terms of spelling, member numbers, etc. Because some super funds look for any reason to not release your super balance, even when common sense should prevail.
Related Articles: Can I Transfer My Super to My Spouse?
How Much Does it Cost to Rollover Super
There are generally no costs incurred for the actual rollover of your super balance itself. However, there may be costs relating to the rollover. For instance, for your current super fund to sell your investment option and your proposed super fund to purchase your investment option, there could be transaction costs, such as buy/sell spreads and brokerage.
What is the Difference Between Rollover and Transfer?
There is no difference between a super rollover and super transfer. This is simply different terminology for the same action. That is, a rollover and a transfer both refer to the process of transferring some or all of your super balance from one superannuation fund to another.
Our financial planning firm, Toro Wealth, specialises solely in helping 50 to 70 year-olds optimise their financial position in the lead up to retirement. If you’re interested in learning more about our service and cost, click here.
Read More: How Do I Transfer My Super?
Articles You Might Also Like: