How to rollover super into an SMSF

How to rollover super into an SMSF From 1 October 2021, rollovers or transfers of super to or from an SMSF must be done electronically using SuperStream. SMSFs need to comply with SuperStream to send or receive rollovers with other regulated complying super funds.

SuperStream is an electronic messaging service which is required prior to the transfer of cash which is generally done via standard EFT.

There are some exceptions being:

in-specie rollovers which often include property in lieu of cash being transferred between SMSFs
a foreign super fund transfer to an SMSF
rollovers to or from a non-complying fund
a family law super splitting payment

There are special rules in relation to transferring super money from a foreign super fund. All of the other exceptions must use a Rollover Benefits Statements (RBS) which is downloadable from the ATO.

SuperStream Ready

Each member of an SMSF must have an electronic service address (ESA) which is provided free of charge when using our SMSF administration services. We use Class Super software which means your ESA is “smsfdataflow”.
The member must advise the ATO of their ESA (which we do on your behalf).
The receiving SMSF bank details must match the ATO’s records.
The receiving SMSF ABN must match the ATO’s records.
Member details must match the ATO’s records – i.e. update records for change of name when a member divorces or gets married and ensure the member’s tax file number is recorded by the ATO as being associated with the SMSF.

How do you rollover super to your SMSF?

The SMSF member can request super money be rolled over from another regulated complying super fund into their SMSF which can be done by:

having their SMSF contact the other fund by making an “Initiate Rollover Request (IRR)” via SuperStream to rollover part or the whole of their super balance
initiating a rollover directly from their other super fund
via myGov by submitting an electronic portability form (EPF)
manually via a paper form “Request for rollover of whole balance of super benefits between funds”

The last two methods can only be used when requesting all of the member’s super balance.

Hint – A copy of the rollover benefits statement (RBS) must be sent to the member within 30 days of the payment being made regardless of using SuperStream or a paper form.

How long does it take?

Generally, the rollover must be made within 3 business days of the request being made. However, the transferring fund has five days to request missing information from the member or request proof of identity and when that information is received the fund has 3 business days to action the rollover.

Various electronic messages are used to verify the information provided and ensure the member is aware of the request being made.

The receiving SMSF has 3 business days to confirm the rollover is received.

Considerations when rolling super out of an SMSF

ensure there is sufficient liquidity to make the rollover
check the SMSF’s bank account for limitation on eftpos transfers– the bank may need to increase the fund’s daily transaction limit or make a number of different rollovers
after verification checks are made the SMSF messaging provider will send a “payment reference number (PRN)” or request the SMSF to create one.
only use one PRN per rollover payment
ensure the trustee includes the PRN in the description of the eftpos payment and to make the payment from the fund bank account which corresponds to the ATO’s records
confirm when the payment has been made

Hint – before processing a rollover ensure:

any section 290 notices (personal tax deduction) have been actioned
contribution splitting notice has been lodged with the paying SMSF
insurance arrangements, direct debits and credits have been reviewed and ceased if required
ensure to obtain proof of identity documents as required in the rollover request form

What happens if my SMSF bypasses SuperStream?

In the receiving fund it will be allocated as a contribution as the rollover is invalid if it is not processed through SuperStream. However, it may be refunded if the member is unable to make a contribution due to age limits or not having a valid TFN.

Receiving fund

Generally, the contribution will be recorded as a non-concessional contribution and counted against the non-concessional contribution cap which may be reduced if the member can claim part of it as a personal tax deduction on completion of section 290 documents. If the non-concessional contribution is determined to be an excess contribution the ATO will advise the member who will be given the opportunity to have the non-concessional contribution refunded. However, the ATO will calculate deemed earnings on the excess non-concessional contribution which is included in the member’s personal tax return and taxed at their marginal tax rate.

SMSF

In your SMSF the withdrawal may be considered an illegal early access to super payment or a lump sum withdrawal if the member has met a condition of release such as being over 65 or over 60 and retired.

The ATO applies additional income tax, tax shortfall penalties and interest to the member personally where the payment is deemed to be an illegal early access super payment.