Superannuation and Rollovers

A superannuation rollover is the transfer of super funds from one super account to another. It can be used when consolidating super or when transferring funds from super to pay for your life insurance premiums.

Select insurers also offer a discount of up to 15% on your premiums if you use a rollover to fund your premiums

Rollover Discount Available
1. Onepath - 15%4. Zurich - 15%
2. TAL - 15%5. BT - 15%
3. Clearview - 15%6. Macquarie - 15%

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More Information about Superannuation Rollovers

It is quite common to take out life insurance through super, which can help with cash flow management and affordability.

When setting up your life insurance in this way, you have a number of set up options:

  1. Take out the insurance through an already established fund which has cash available to pay for premiums
  2. Set up a new super policy exclusively to hold your insurance policies.

If you elect to set up a new policy which does not hold enough money to pay for your premiums, you will need to set up a partial rollover from your super fund to fund the premiums of your policy.

This partial can generally be organised by your insurer.

If you have decided to transfer funds, you have two options – a partial or a full rollover.

What is a partial rollover?

A partial rollover is when only a portion of the funds are transferred from one fund to another. This may be done for a variety of reasons:

  1. You have elected to hold a portion of your life insurance through super and are rolling over funds to help pay for your premiums
  2. You have death and disability benefits attached to a fund and do not wish to lose them by closing your existing fund.

What is a full rollover?

A full rollover is when all the funds in one account are transferred to another account, therefore closing the fund and losing any benefits attached to it.

You may elect to do this if you are changing super funds, consolidating super funds or you have death and disability benefits already set up in another fund and do not wish to keep any in your old or existing funds.

In order to transfer funds, you will generally need to fill in a Rollover Initiation Request form which is provided by the Australian Taxation Office (ATO).

The form is available online or may be available from your super fund, including industry super funds.

Information you will need to provide includes:

  1. Family name
  2. Given name
  3. Other/Previous Names
  4. Date of birth
  5. Tax File Number
  6. Gender
  7. Contact phone number
  8. Details of both funds (To and from fund):
    • Fund name
    • Fund phone number
    • Your membership or account number
    • Fund Australian Business Number (ABN)
    • Unique Superannuation Identifier
  9. Your residential address
  10. Your signature

Once the form is filled in, you will need to send it to either the fund you are transferring to or the fund you are transferring from.

If you have multiple funds and are consolidating them into one fund, you will need to fill out this form for each of the funds you wish to transfer into the one fund.

Apart from transferring funds to pay for your life insurance premiums, you may choose to transfer your funds in a number of other circumstances:

  1. You are changing from one super fund to another
  2. You are consolidating your super funds into one fund

You may wish to consolidate your super for a number of reasons:

  • Potentially maximise retirement savings by holding all cash/assets in the one fund
  • Remove payment of multiple management fees by holding super in one fund
  • Remove payment of multiple insurance premiums for default cover held in multiple funds
  • Easier management as only dealing with one fund and not multiple funds

The transfer of funds from one super fund to another is not included in the assessable income of the fund unless it is an untaxed element – that is the funds have not paid any tax on them.

If you have an untaxed element, you need to include this in the assessable income for your fund in the year of the rollover.

For more information, visit the ATO website on rollovers or speak to your accountant or tax agent.

If you elect to complete a full rollover to a new fund, your existing fund will close and you will lose any death or disability benefits held within that fund. Should you decide to do this, you should wait until your new policy is set up and active before removing any insurance benefits.

You can elect to transfer funds into your SMSF in exactly the same way as if you were transferring between two other funds. You simply need to fill in the same form with your SMSF details.

Published: March 3, 2015
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