Switching your client's account from super to pension

You can request a switch at any time for your eligible super or pension accounts by using the online switch form. 
Please note you can’t rollover a client’s existing Term Allocated Pension (TAP) accounts into a new Macquarie TAP. This product type is not available in Macquarie Manager II, Macquarie Consolidator II or Macquarie Super.

How to complete the online switch form

  1. Log in to Adviser Online
  2. From the global search bar, select Accounts from the drop-down menu
  3. Search for your client’s Wrap account number or name
  4. Select the Quick links bar on the right-hand side of the Account Overview screen and click Switch to pension, or Switch to super.

Ensuring an account is ready for a switch

  • Pension switches and adding funds – If you’re switching to a pension account and there are other funds you want to include to commence the pension, please ensure those contributions and/or rollovers are deposited into the existing super account before submitting the request.
  • Claim outstanding tax deductions – Ensure you've notified us of your client’s intent to claim deductions on personal contributions or vary any previous deductions as part of the switch request, as you won’t be able to do this after the switch.

To request a full switch

  • Stop automated plans – Check all automated plans including automatic cash management, automatic rebalancing, dollar cost averaging and/or direct debits have been cancelled on the account you’re switching from. You’ll also need to re-establish these on the new account.
  • Review the insurance with the client – Ensure your client provides an election to cancel or transfer their insurance. If your client is taking out a new stand-alone policy, it’s important this is established before cancelling the policy with us.
  • Settle any outstanding transactions and dividends/distributions – Check if all transactions have settled and all expected distributions and dividends have been received into the cash account. If they haven’t, this will delay the full switch of the account.

Additional authorisations required

  • If you want to carry over the existing non-lapsing death benefit nomination, can now do this via the Online Switch form. You’ll need to complete a new Digital Fee Form available on Adviser Online before any advice fees will be charged on the new account.
  • Where there is a Power of Attorney nominated on the account and the client elects to:
    • carry across their existing non-lapsing death benefit nomination as part of the switch application, the client needs to authorise the application.
    • not carry across their existing non-lapsing death benefit nomination as part of the switch application, the application can be authorised by the Power of Attorney.

More information about switching from super to pension

Read the relevant section below to find out more.

Processing times for completing a switch

Expected timeframes: 10 business days

It will generally take up to 10 business days to complete the switch. The timeframe depends on the individual circumstances and existing holdings. If all information is provided and the account is ready for the switch to be processed, the request may be completed sooner.

Processing times begin only when we’ve received all necessary requirements for a request. To avoid delays, please ensure you’ve completed all forms and uploaded all supporting documents before submitting. 

Requirements to complete a switch

Outstanding transactions 

We won’t be able to complete a switch request of the full balance until all outstanding transactions have settled.

  • Pending settlements on assets within the existing account will delay the switch to the new account (this includes trades pending settlement within SMAs)
  • Transactions, e.g., income distributions and tax on income distributions, need to settle before a switch can be processed
  • Corporate actions your client is intending to participate in need to be completed before a switch can be processed
  • Automated plans such as cash management, rebalancing and dollar cost averaging should be cancelled to avoid any new actions on the account delaying the processing of the switch.
Switches between products

If the switch is performed between Manager, Accumulator and Consolidator products, the cash component will need to be transferred via a rollover rather than an in-specie product switch (due to different cash hubs).

The investment menu for the new product your client holds may not allow for certain asset types held in the existing super account. Please refer to the Super Investment Menu for a detailed breakdown of assets compatible with each product type.

SMA holdings 

If the account holds an SMA, this may take additional time to complete.

Tax deductions

Where a tax deduction is required on personal contributions, the time taken to finalise your account opening could increase. 

Account opening /existing account closure

If a new account needs to be created or an existing account needs to be closed, this requires additional steps including final fee payments.

Pension update 

If a pension update is required as part of the switch, this could add additional time to the request.

Monthly fee process 

If a switch request is submitted during the monthly fee run process, it will be completed after the fee run has been finalised. Please allow up to an additional 5 business days if submitting requests a few days before or after month-end.

Asset and cash allocations

When providing an asset and cash allocation to be switched to a new pension account or to remain in an existing super account, please consider the following:

  • The total investment and cash minimum for the new account needs to be met during a full switch, and both accounts’ investment and cash minimums need to be maintained during a partial switch. Please refer to the product disclosure statement for the specific investment and cash minimums for your client’s product(s)
  • ASX-listed equities to be transferred need to have a whole unit specification provided, or a request to transfer full holdings
  • Term deposits must be transferred in full. Term deposits near maturity will need to reach maturity before the switch can be processed.

Set up a reversionary beneficiary on a pension account

Your client can set up a reversionary beneficiary on a pension account when the pension account is opened. To do this, fill out the beneficiary form available from Adviser Tools.

If your client wants to add the reversionary nomination on their existing pension account, they’ll need to commute (converting the pension into a lump sum payment) and recommence a new pension. To do this, they’ll need to complete the Reversionary Nomination form. This may affect Centrelink income support recipients and Commonwealth Seniors Health Card holders. This is because any income test grandfathering will be lost where a full commutation of an existing pension and a commencement of a new pension happens on or after 1 January 2015.   

If your client validly nominates a reversionary pension beneficiary, the Trustee will be bound by it.  

The reversionary beneficiary must be either a:

  • dependant of your client (for example a spouse, a financial dependent, or a person who has an interdependency relationship who is not a child), or
  • a child of your client who is either:
    • less than 18 years old
    • aged 18 to 24 inclusive and is financially dependent on your client
    • aged 18 or more and has a qualifying disability (broadly, this is a disability that is permanent or likely to be permanent and results in the need for ongoing support and a substantially reduced capacity for communication, learning or mobility).

We won’t accept a reversionary pension nomination made by an attorney or any other agent. To receive a benefit, the beneficiary nominated must meet one of the criteria listed above at the time of your client’s death. 

If the reversionary pension beneficiary has passed away before your client, we’ll generally pay the death benefit to your client’s legal personal representative.  

If the law doesn’t permit the Trustee to pay the nominated reversionary beneficiary a pension when your client passes away, but the nomination is otherwise valid, we’ll pay the death benefit to the nominated reversionary beneficiary as a lump sum. 

A reversionary pension nomination can only be revoked by the client where the person nominated is no longer a valid dependant under super law. An attorney or any other agent cannot revoke a reversionary nomination. We’ll generally ask for evidence that the dependant is no longer valid, in these instances you may need to provide a certified copy of the death certificate.

Tax benefit adjustments after a pension commences

If your client has switched between super and pension accounts during or since the end of the previous financial year, the tax calculation will be completed on both accounts, with the transactions being processed to the open account. 
Where an in-specie transfer of assets is used to commence a pension, the assets aren’t received into the pension account until the day after they’re transferred. Therefore, the value of these assets when the pension commences will generally be different to the transfer value due to market movements. This should be factored in when commencing a pension to avoid exceeding the transfer balance cap.

To commute a client’s death benefit pension

Your client can either roll over a Death Benefit pension to another super fund or withdraw the funds. If they’re rolling over a Death Benefit pension, the receiving super fund must commence a Death Benefit pension or pay out the benefit as a lump sum Death Benefit. Your client can’t retain a Death Benefit in an accumulation account.  
To complete the rollover or withdrawal process, your client can complete our withdrawal/rollover form. You can download this form from Adviser Tools.

Avoid exceeding the transfer balance cap

The only way to be certain that a pension account commences with the exact available transfer balance cap is to transfer cash. We are unable to transfer a specific value when transferring assets in-specie due to fluctuations in market prices.  

Where an in-specie transfer of assets is used to commence a pension (including through the Pension Update facility), the pension account won’t receive the assets until the day after the transfer. As a result of market movements, the value of these assets when the pension commences will generally be different to the value when the transfer is initiated.  

This should be factored in when commencing or updating a pension to avoid exceeding the transfer balance cap.  From 1 July 2023, the transfer balance cap is indexed to $1.9 million, however, your client may have a different transfer balance cap depending on their circumstances. 

Please refer to the ATO website to determine your client’s transfer balance cap, your client can also log into their ATO MyGov account and check their transfer balance account cap information. 

Client has already exceeded the transfer balance cap

If your client has exceeded the transfer balance cap, they can commute or withdraw the excess amount (inclusive of earnings) before the ATO determination is issued. This excess amount can be moved to the accumulation phase or taken as a lump sum member benefit paid from the pension.

If the excess transfer balance cap issue is not resolved, the ATO will issue a determination letter that will contain a breakdown of the amount to remove from the pension phase including the excess amount and excess transfer balance earnings.

Once the excess transfer balance has been removed, your client should receive a separate excess transfer balance cap tax assessment from the ATO. This tax takes into consideration the number of days your client’s transfer account balance exceeded their transfer balance cap. The tax will be levied on the earnings amount at 15% for first time breaches and 30% for any subsequent breaches.

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