Rollovers

About rollovers

A rollover is when you, as a member, transfer some or all of your existing super between super funds, including SMSFs.

It is a legal requirement for rollovers to be processed electronically, using 2 components:

• a data message
• a separate payment transfer.

There are some exceptions.

Trustees must complete the rollover no later than 3 business days after receiving all the required information. Systems must be in place to action the requests. If your fund doesn't meet this requirement they could receive a compliance breach.

Rollover requirements

Your rollover may fail if trustees don't ensure the following requirements are met:

• you engage an SMSF messaging provider to obtain an active electronic service address (ESA) that offers rollover services and update your ATO records to advise us of your ESA.
• your SMSF has an Australian business number (ABN)
• your SMSF has a complying or registered status on Super Fund Lookup
• member and fund details held by us, the sending fund and the receiving fund are up-to-date and identical for example, where the member name is recorded as 'Sue' with the fund and 'Susan' with us, this will prevent the rollover.
• you contact the transferring fund to understand any proof of identity (POI) requirements
• you have a unique financial institution account for your SMSF recorded with us.

We strongly encourage all SMSFs to be established with a unique bank account. However it is acknowledged there are some administrative platforms that offer omnibus accounts, where the assets of multiple funds are combined under a single account which is in the name of a single custodian.

As trustee it is your responsibility to ensure the SMSF is investing in a legitimate product and the risks of investing in a product with an omnibus account feature are understood. The use of omnibus accounts may result in further enquiry and/or delay with some transactions.

Where you're rolling out of your SMSF, be aware of the financial institution's daily transaction limit.

ESAs can expire over time. It's important to make sure yours is still active with your provider. Contact them for more information.

To record your fund’s active ESA details with us, you can:

• use the Profile menu in Online services for business
• contact a registered agent
• phone us on 13 10 20.

Types of rollovers

The process for actioning a rollover will depend on whether you're rolling super into or out of your SMSF. Follow the steps for rollovers from:

• an APRA-regulated fund to your SMSF
• your SMSF to an APRA-regulated fund
• your SMSF to another SMSF.

Rollovers from an APRA-regulated fund to your SMSF

Follow these steps to make a rollover from an APRA-regulated fund to an SMSF.

Step 1: Member requests a rollover

Members should engage with their APRA-regulated fund before requesting the rollover to:

• ensure their details held with the APRA-regulated fund and with us are an exact match – any mismatch could delay or prevent processing
• discuss what POI documents may need to be provided – for example a marriage certificate or SMSF bank account details.

Members can request a rollover through:

• the APRA-regulated fund – either whole of balance transfers or partial transfers can be made this way
• ATO online services – only whole of balance transfers can be made this way
• the SMSF messaging provider – issue a rollover initiation request to the APRA-regulated fund.

If the member doesn't provide all required information, the rollover will be delayed or rejected.

If the APRA-regulated fund suspects illegal activity, they will report it to the Australian Transaction Reports and Analysis Centre (AUSTRAC) and any relevant law enforcement agencies.

Step 2: APRA-regulated fund undertakes mandatory verification

The APRA-regulated fund runs mandatory verification checks to ensure the fund and member details match records held by them and us.

To protect against potential fraud, we send members emails or text message alerts advising of the rollover request. If the member is not aware of the request, they need to contact the transferring fund immediately to stop it.

Step 3: Confirm your SMSF has received the rollover

The APRA-regulated fund will generally process and pay the rollover to your SMSF bank account within 3 business days of receiving all the information required. They will notify your SMSF messaging provider when this occurs.

They may take longer to process your request when the:

• underlying assets are illiquid
• product is a closed or defined benefit product
• pension account is a type other than an account-based pension.

When your SMSF receives the payment and associated data, check that the payment reference number (PRN) in the data message matches the PRN provided with the payment.

Then you must confirm receipt of the rollover by sending an outcome response message through your SMSF messaging provider to the APRA-regulated fund within 3 business days.

Rollovers out of your SMSF to an APRA-regulated fund

Follow these steps to make a rollover out of your SMSF to an APRA-regulated fund.

Step 1: Member requests a rollover

Members can request a rollover by submitting a request:

• to their SMSF – include all relevant details and ensure they are identical to those recorded with us and the APRA-regulated fund
• to their APRA-regulated fund – you may need to provide POI or bank verification documents and then the APRA-regulated fund will send the request to your SMSF messaging provider
• through ATO online services – only for whole of balance transfers (this option may be preferred where a relationship breakdown occurs between trustees of the SMSF).

Trustees must action this within 3 days of receiving all the required information.

Step 2: Trustee actions the rollover request

Regularly reviewing members' needs, changing circumstances and fund performance will mean you're better prepared for a rollover request. Make sure you:

• have enough liquid assets and allow for any fees incurred by your SMSF – you need enough money in your SMSF bank account
• check your financial institution daily transaction limit – if you are rolling over more than your limit, you may need to:
  • increase your daily transaction limit
  • make multiple rollovers of a smaller amount – each rollover must match the amount of each separate payment and have a separate PRN
• engage your SMSF messaging provider or administrator to send the data message ensuring mandatory verification checks are actioned – they must do the following checks:
  • validate the member's tax file number (TFN) with SMSFmemberTICK
  • verify the APRA-regulated fund details using the Fund Validation Service.

After you action a rollover, your SMSF messaging provider will provide a PRN or advise you to generate your own. You need to quote this PRN when making the payment.

Creating a PRN

To generate your own PRN, use the following:

• the SMSF’s ABN
• 4 digits to represent the day and month (DDMM)
• a 3-digit sequence based on the number of payments the SMSF has made on this day.

For example, the PRN for an SMSF with an ABN of 12 345 678 910 making a payment on 14 October would be 123456789101410001. This is created by the:

• ABN (12345678910)
• date (1410)
• sequence number (001 – first payment of the day)

It is essential that the PRN on the rollover message exactly matches the one on the payment. The receiving fund can only accept the payment if they can reconcile the PRN from the data message with the one on the electronic funds transfer.

Step 3: Trustee pays the rollover

The payment of the rollover can be made using electronic funds transfer. You must make the payment as soon as possible after sending the data message. Use the Fund Validation Service to verify the APRA-regulated fund’s current banking details.

When you make the payment via your financial institution:

• use the correct PRN provided to you by your SMSF messaging provider or generated by your SMSF
• only make one payment for each PRN
• pay the exact amount allocated to that PRN
• if you need to make multiple payments, you need multiple PRNs to align to the multiple data messages.

Failure to do this will result in the rollover being delayed or rejected, the fund will be non-compliant with the rollover request which can result in a regulatory contravention.

When the APRA-regulated fund receives your payment and associated data, they will send an outcome response message to your SMSF messaging provider to confirm their receipt within 3 business days.

Rollovers from your SMSF to another SMSF

Follow these steps to make a rollover from your SMSF to another SMSF.

Step 1: Member requests a rollover

Members can request a rollover by submitting a request:

• in writing to their SMSF – include all relevant details and ensure they are identical to those recorded with us and the APRA-regulated fund
• through ATO online services – only for whole of balance transfers (this option may be preferred where a relationship breakdown occurs between trustees of the SMSF).

Trustees must action this within 3 days of receiving all the required information.

Step 2: Trustee actions the rollover request

Regularly reviewing members' needs, changing circumstances and fund performance will mean you're better prepared for a rollover request. Make sure you:

• have enough liquid assets and allow for any fees incurred by your SMSF – you need enough money in your SMSF bank account
• check your financial institution daily transaction limit – if you are rolling over more than your limit, you may need to:
  • increase your daily transaction limit
  • make multiple rollovers of a smaller amount – each rollover must match the amount of each separate payment and have a separate PRN
• engage your SMSF messaging provider or administrator to send the data message ensuring mandatory verification checks are actioned – they must do the following checks:
  • validate the member's TFN with SMSFmemberTICK
  • verify the fund and member details using the SMSF verification service (SVS).

When the SVS is used, the member receives an email or text message alert before the rollover is made. If they did not request the rollover, they need to contact the transferring fund immediately to stop the rollover.

After you action a rollover, your SMSF messaging provider will provide a PRN or advise you to generate your own. You need to quote this PRN when paying the rollover.

Step 3: Trustee pays the rollover

You must make the payment as soon as possible after sending the data message.

When you make the payment via your financial institution:

• use the correct PRN provided to you by your SMSF messaging provider or generated by your SMSF
• only make one payment for each PRN
• pay the exact amount allocated to that PRN
• if you need to make multiple payments, you need multiple PRNs to align to the multiple data messages.

Failure to do this will result in the rollover being delayed or rejected, the fund will be non-compliant and can result in a regulatory contravention.

When the receiving fund receives the payment and associated data, they will send a response to your SMSF messaging provider within 3 business days to confirm their receipt.

Exceptions from electronic rollovers

Generally, rollovers to or from your SMSF must be processed electronically. There are some exceptions, including:

• in-specie rollovers – these are managed through a process agreed between the relevant parties
• a foreign super fund transfer
• rollovers to or from a non-complying fund – you must use the Rollover benefits statement (RBS)
• a family law super splitting payment – you must use the RBS.

Death benefit rollovers

If it is a death benefit rollover and the recipient is a dependent beneficiary, you also need to do the following within 30 days of the rollover payment:

• Complete the Death benefit rollover statement (DBRS).
• Give the DBRS or a statement with the same information to the dependant beneficiary.

The DBRS needs to be sent to the receiving fund for any dependent child beneficiary as soon as possible. See more about SuperStream death benefit rollovers.

Keep a copy of the documentation to show your SMSF Auditor that the rollover process was compliant.

Correcting a mistake

If you made a mistake with the rollover payment, contact the receiving fund to resolve.

Reporting following rollovers

In some situations, you may be required to report additional information to us after a rollover.

Rolling over untaxed elements of benefits

A rollover from another fund is not included in the assessable income of your fund unless the rollover amount includes an untaxed element.

In the financial year the rollover occurs, if it does contain an untaxed element, you need to include the amount of that element in the assessable income of your fund up to the untaxed plan cap amount.

If the untaxed element exceeds the untaxed plan cap, the originating fund should withhold tax (at the top marginal rate plus Medicare levy) from the amount over the cap before releasing the rollover to your fund. You can then add this now-taxed amount to the tax-free component of the rolled-over amount.

Ensure you report all member contributions in your SMSF annual return, even if they were rolled out to another fund later.

Income streams

If a member of your SMSF was receiving an income stream and starts a new income stream with their new fund following the rollover, you need to report this to us.

You can report this as a commutation through the transfer balance account report.

If you do not report the rollover to us when it happens, double-counting of your member’s income streams may occur.

Rollovers due to winding up

If your SMSF is being wound up:

• a final rollover can be made once the cleared funds have been determined
• after lodging your final annual return, you have approximately 28 days to rollover any funds before the ABN is cancelled.

But don't forget there are other actions you need to take if your SMSF is winding up. Follow all steps to wind your fund up successfully.