On this page, we explore the extra things to think about if you want to wind up your SMSF and are already receiving pension payments (also known as “in the pension phase”). Explore our guide to winding up an SMSF for all the steps.
Key things to know
As well as following the steps to winding up an SMSF, there’s some extra things to know if you’re in the pension phase.
Your pension has to stop (or be “commuted”) before you can close your SMSF.
If more than one trustee is moving over (e.g. you and your partner), each person’s pension will be handled separately.
There’ll be a gap between when you stop your SMSF pension and when your new super fund starts, so it’s important to plan your finances for this period.
Lifetime, life expectancy, and market-linked pensions have extra rules. Talk to a financial advisor for help with this.
First things first, you’ll need to stop (or “commute”) your pension before you can close your SMSF. You can choose to take your remaining money as a lump sum, roll it over to a super fund, or a combination of both.
If you’re rolling over some or all of your money, there’ll be a gap between when you stop your pension and start to receive money from your new super fund. Make sure you plan ahead for where your finances will come from during this period. That might look like adding a bit extra to your savings in the lead up or taking some of your money out of your SMSF as a lump sum when you stop your pension.
If your SMSF is invested in assets that can be hard to sell – like property – it’s worth allowing plenty of time to get this done. Selling can trigger capital gains tax, and transferring an asset to yourself still counts as a sale.
You might want to get enough cash out as a lump sum to cover final tax, audit, and professional fees.
Once your pension stops, you need to let the ATO know by filling out a transfer balance account report. This needs to be lodged within 28 days from the end of the quarter that you stopped your pension in. For example, if you make the change in February, you’ll have 28 days from the end of March to lodge with the ATO.
You’ll also have to keep in mind your personal transfer balance cap, which is how much you’re allowed to transfer into one or more retirement funds in your life. Find your personal cap on myGov, or read the full instructions.
It only takes a few minutes to join us. Once you’ve joined and transferred your money, it’ll first go into a Future Saver account. Then when your money is settled, we’ll automatically transfer it into your new Retirement Income account.
Once you’re set up, you can choose from various investment options or leave it up to our experts. That way you keep control over your money, without the extra admin.
Just a note – if you have a partner, both of you will need separate accounts with us.
If you receive the Age Pension or hold a Seniors Health Card, make sure you tell Services Australia after you’ve moved your money to Aware Super. You need to let them know about these changes within 14 days, or you could be overpaid and have to pay it back. You can do this through your Centrelink online account or by contacting Services Australia.
Your SMSF nominations – or who you’re leaving money to – will end when you close your fund, so make sure you set up new ones with Aware Super.
Before your SMSF pension stops, your fund needs to pay you at least the minimum for the part of the year your pension has run. This pro rata amount is based on the number of days from the start of the financial year (or when your pension started, if later) to the day it stops.
If the minimum isn't paid, the ATO may treat your pension as though it ended at the start of that income year for tax purposes. That means your fund may lose its tax exemption on earnings for the year. There are also transfer balance account consequences.
In rare cases the ATO may allow some flexibility, but this isn't something to rely on. Your accountant can calculate the amount before you stop the pension.
It might. Some account-based pensions that began before 1 January 2015 are assessed under older, often more favourable rules, provided you’ve been continuously receiving an income support payment since before that date.
When you join Aware Super, your income stream is usually assessed under the current rules, so the older treatment may not carry over. If your pension started before 2015, check how it affects your payments, ideally before you stop the pension.
Yes. With a Retirement Income account, you can nominate your spouse or de facto partner as a reversionary beneficiary. It's legally binding, doesn't expire, and your partner gets the same payments at the same time until the money runs out.
The amount they receive also counts toward their own super balance cap.
Why choose Aware Super?
# Moneysmart research, 2026. Source: https://moneysmart.gov.au/how-super-works/self-managed-super-fund-smsf
[AD2] Members can get advice about their Aware Super accounts at no extra cost, or advice on their broader needs for a fee.
[F1] Chant West Super Fund Fee Survey 30 June 2026, High Growth [81-95% in growth assets] investment option index and $50,000 account balance. Fees and costs can vary from year to year. Past fees and costs are not a reliable indicator of future fees and costs. Fees and comparisons may differ for other investment options and account balances. Zenith CW Pty Ltd ABN 20 639 121 403, AFSL 226872/AFS Rep No. 1280401. Third-party data does not contain all information required to evaluate the nominated service providers. To the extent that any Information provided is advice, it is limited to General Advice only and has been prepared without considering the objectives or financial situation of any individual, including target markets where applicable. It is not a recommendation to purchase, sell or hold any product and is subject to change at any time without notice. Individuals should seek independent advice and consider the PDS or offer document before making any investment decisions. Data is provided in good faith and is believed to be accurate, however, no representation, warranty or undertaking is provided in relation to the accuracy or completeness of the data. Data is subject to copyright and may not be reproduced, modified or distributed without the consent of the copyright owner. Except for any liability which cannot be excluded, Chant West does not accept any liability whether direct or indirect, arising from use of the data. Past performance is not an indication of future performance. Refer to www.chantwest.com.au for full details on Chant West’s research methodology, processes and FSG: https://www.chantwest.com.au/financial-services-guide