What is the most appropriate Superannuation Fund in Australia for your Pension Transfer?
The most appropriate superannuation fund in Australia for any transferred funds; for example an Industry, Retail Fund, Self Managed Superannuation Fund (SMSF) or Small APRA fund (SAF) is going to be a function of several considerations, including;
- The size of the funds transferred; as a rule of thumb the establishment and running costs associated with a SMSF probably means that it is not cost efficient for a fund balance below AUD3000,000. Note that if your reason for establishing a SMSF is to provide the flexibility to invest in property, bear in mind that restrictions might exist in terms of the use of transferred funds - for example, QROPS funds transferred from the UK may not generally be invested directly in real estate.
- The performance and cost efficiency of the relevant funds
- The role you wish to play in the management of your funds. If you wish to have the maximum involvement and flexibility in terms of how your funds are invested and managed a SMSF or SAF would probably be the best fit, although public/industry funds are cost effective and now provide a wide spectrum of features suiting the passive to reasonably active investor; together with access to benefits such as group life insurance.
- Whether you have a financial planner who manages your superannuation in concert with other investments and would like them to be on a common platform, and
- Whether regulatory restrictions apply; the British Government, since mid 2006, has required that pension funds be transferred to Qualifying Recognized Overseas Pension Funds (QROPS) or significant taxes are levied on withdrawals. As at June, 2015 there were more than 1500 Australian superannuation funds classified as QROPS, but regulatory changes in the UK saw HMRC take the view that Australian funds could no longer meet QROPS requirements and virtually overnight the number of funds was reduced to a one solitary fund in July, 2015.
Following these changes, the only individuals able to make a cost-effective transfer of their pension from the UK to Australia, were those aged 55 or above transferring into specially created, QROPS qualifying, SMSF's or selected retail fund.
Ideally the choice should be made in concert with a financial advisor based on your specific plans and objectives.
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