A long term client of Rothgard started a new job with a large institution.
He had no choice but to enrol in their superannuation fund.
On enrolling, they gave him a form which said “if you would like to consolidate your existing superannuation into your new fund, sign this form.”
This triggered his memory. He was aware of a very old, small fund containing $800 which had been floating around for years from an old job. He had always intended on tidying this up. “Why not” he though. He signed and returned the form.
Little did he realise that his nest egg of approximately $400K in hard earned superannuation (being managed by Rothgard) would also be rolled over.
This wasn’t supposed to be part of the plan.
The net result?
In order to roll over the funds, the $400K worth of assets firstly had to be sold down to cash, which triggered a Capital Gains Tax event.
The Capital Gains Tax liability was approximately $15,000, which in turn was deducted from the funds before they moved across.
He ended up being $15K out of pocket and unfortunately it doesn’t appear the situation can be reversed.
He immediately realised this was a result of filling in the rollover form.
You see, when using the paperwork of any fund, it is a “super fund” to “super fund” transaction (we as the financial advisers weren’t even notified the money was gone).
Had we been managing the transfer on his behalf we could have:
These rollover forms can sometimes be a little misleading as they are pitched towards “finding lost super”. The problem is, the new SuperStream system implemented by the government makes moving superannuation VERY easy.
One tick of the wrong box can have very costly consequences.
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