Switching between Super and Pension accounts

Switching is the process of transferring assets and/or cash in the form of a rollover between superannuation and pension products (or vice versa) without the requirement to sell down assets.

• A full switch is where your entire balance will be switched across to the new product. Your existing account will be closed.
• A partial switch is where you leave a portion of your balance in your existing product or transfer a portion of your balance to the new product and keep your existing account open.

For all switches (partial and full), you need to complete the following steps before you submit a product switch request:

• Add additional funds before switching from Super to Pension – Ensure those contributions and/or rollovers are deposited into the existing super account before submitting the switch request. 
• Claim outstanding tax deductions – Have your client claim deductions on personal contributions or vary any previous deductions as part of the switch request, as you won’t be able to complete this after the switch.

 For full switches only, you also need to:

• Cease automated plans – Confirm all automated plans have been cancelled on the account you’re switching from. You’ll need to re-establish these on the new account. See Understanding Account Income Redirection.
• Review the insurance with the client – Have your client provide an election to cancel or transfer the insurance. If your client is taking out a new stand-alone policy, it’s important this is established before cancelling the policy with Macquarie.
• Check for outstanding transactions and dividends/distributions – Check if all transactions and trades have settled and all expected distributions and dividends have been received into the cash account, as we won’t be able to complete a switch request of the full balance until this has occurred.

For other tips to avoid delays see What could delay a product switch?

You can make both partial and full switches at any time for your eligible Super or Pension accounts by following these steps:

• From Super to a new Pension account, or from Pension to a new Super account
• From Super to an existing Pension account
• From Pension to an existing Super account.
  

Fee arrangements will not be carried across to the new product and you will be required to complete a new Advice fee form, available in 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 Power of Attorney can authorise the application.

Once we’ve received the request, we’ll review this within 1-2 business days. We usually complete these requests within 10 business days (note: the timeframe for a request to be completed depends on the individual circumstances and existing holdings). 

You can check the status of product switch requests submitted through Adviser Online via the Request Centre.

Any of the following scenarios may impact the processing time of a product switch:

• Outstanding transactions need to settle before a switch can be processed.
• Switches between certain products (e.g. between Manager/Accumulator and Consolidator products) because we will need to transfer the cash component via a Rollover rather than in-specie product switch (due to different cash hubs).
• SMA holdings for Super to Pension switches will need to be switched separately and may take us additional days to complete.
• New account opening or existing account closure requires additional steps including final fee payments.
• Corporate actions need to be completed before a switch can be processed.
• Pension updates could add additional time to the request.
• Switch requests submitted during the monthly fee process may require an additional 5 days (i.e. if request submitted a few days before or after month-end).
• If a tax deduction is required on personal contributions the time taken to process the switch could increase.
• Pending settlements on assets within the existing account will delay the switch to the new account (this includes trades pending settlement within SMAs).
• Once you have initiated a switch, do not buy/sell new trade until the switch is complete.
  

If you’re providing an asset and cash allocation to be switched into a new Pension account or to remain in an existing Super account:

• the total investment and cash minimum for the new account needs to be met during a full switch
• both accounts’ investment and cash minimums need to be maintained during a partial switch – 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.
  

Once the product switch is complete:

• your client will keep their account name
• your client will have a new account number and transaction history
• you will need to set up any automated plans and transfer any insurance policies directly with the insurer.

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.