Compare Superannuation Funds in Australia

Learn more about superannuation

What's new in superannuation in January 2021?

2020 was a challenging year for superannuation funds, with the global pandemic wreaking an unexpected havoc on the Australian economy and budgets of millions of Aussies.

The Early Release Super Scheme was implemented to help struggling Aussies gain access to much-needed funds off the back of growing unemployment rates and economic uncertainty. Since April, APRA found that $35.8 billion in super had been withdrawn under the scheme, with $7,645 the average payment across both rounds.

However, RateCity warned Australians to consider alternatives before taking money out of their super or enact a plan to put the money back in when they can. This is because the long-term impacts with withdrawing super can be detrimental to your overall retirement balance. ASIC reported that the average 30-year-old who takes out $10,000 today will have an estimated $21,516 less in retirement.

New research from Rainmaker Information’s 2020 Superannuation Benchmarking Report released in January indicated that there is an “underperformance challenge” needing to be tackled within the superannuation industry. The research found that super funds continue to “struggle to match asset class indexes” across several major asset classes.

This new research is the perfect reminder to consider your super fund’s performance carefully. As we move into 2021, January is the perfect time to consider performing a financial health check on your finances – including your superannuation.

Updated by Alex Ritchie on January 8, 2021

How does superannuation work?

Your employer is responsible for paying your superannuation.

Your annual superannuation must be at least 9.5 per cent of your ordinary time earnings. For example, if you earn $100,000 (before tax), your employer must pay you at least $9,500 in super per financial year. This is known as the ‘superannuation guarantee’ or SG. Employers must make SG contributions into your super account at least once every three months.

You qualify for the superannuation guarantee if you are over the age of 18, earn $450 or more before income tax each calendar month, or work 30 hours or more a week.

This applies to full-time and part-time employees, and some casual employees. It also includes temporary residents to Australia.

The super guarantee contribution rate is scheduled to increase every year, starting from mid-2021. Each year, the SG rate should increase by 0.5 percent, until superannuation guarantee contributions reach 12 per cent in mid-2025. However, these increases to the super guarantee rate could be delayed, depending on Australia's economic situation.

You may choose to pay extra money into your super fund, on top of what your employer is required to pay. This could include one-time payments, or a regular salary sacrifice arrangement with your employer. Some of these extra super contributions may be tax deductible - check with the Australian Taxation Office (ATO) for more details.

Many super funds invest your super contributions into an investment portfolio. This may help grow your wealth faster than you’d likely earn in interest simply by depositing this money in a savings account or term deposit. Different investment strategies may mean different returns on your investments.

Once you reach a certain age, you can start accessing money from your super fund as an income stream. This can help pay for your retirement lifestyle, reducing your reliance on the age pension.

Which superannuation fund should you choose?

Put simply, you should choose whatever superannuation fund you believe is the best.

Each person will have their own definition of ‘best’, depending on their preferences. For example, you may want to look for:

The fund that has delivered the highest net returns over the past five years
The fund that has earned the highest approval ratings on online review sites
The fund that has the most appealing investment options

Those are just examples – you might have your own definition of what constitutes the best super fund.

The key is to do your research, compare your options and then choose the super fund you believe is the best.

What are the benefits of superannuation?

There are two main benefits of superannuation:

You build a nest egg for retirement
You save and invest in a tax-effective structure (super is taxed at only 15 per cent)

What are the disadvantages of superannuation?

The main disadvantage of superannuation is that it is compulsory. So instead of getting access to your money today (in the form of a higher take-home salary), it gets locked away – potentially for decades.

What can you use superannuation for?

Superannuation is meant to fund your retirement. Apart from a few exceptions, you can only access your superannuation:

If you’re permanently retired and you reach your ‘preservation age’, which is between 55 and 60, depending on when you were born.
If you’re still working and you turn 65.

However, you may be able to access your superannuation early in some special circumstances, such as:

If you’ve suffered permanent or temporary incapacity
If you’ve received commonwealth benefits for 26 continuous weeks but still can’t meet your immediate living expenses
If you’re seriously ill and need to pay for medical treatment
If you have a terminal condition and are likely to die within two years

What types of superannuation are available?

There are six types of superannuation funds:

Fund	Description	Availability
Retail super funds	Run by for-profit institutions such as banks and financial services companies	Everyone
Industry super funds	Run by not-for-profit institutions	Some industry funds restrict membership to certain industries
Public sector super funds	Created for federal and state government departments	Public servants
Corporate super funds	Run by companies	Employees of those companies
Eligible rollover super funds	Special holding accounts; can’t receive contributions from employers	For lost members or inactive members with low balances
Self-managed super funds	SMSFs are for Australians who want to manage their own investments	Everyone

Most super funds are accumulation funds. When you retire, the fund will pay you whatever superannuation you saved up during your working life.

Some corporate or public sector super funds are defined-benefit funds, though most are closed to new members. When you retire as an eligible employee, you’ll receive payment based on a formula. For example, you might receive ongoing retirement income calculated as a percentage of your final salary. You might instead receive a lump sum calculated on the number of years you spent with your employer.

How do you compare superannuation?

Australians have access to hundreds of superannuation funds and tens of thousands of investment options. It’s important to do your research to find the best super fund and best investment option for you. Choosing the wrong super fund or investment option can be costly.

There are five main ways to compare superannuation funds:

1. Fees

You may prefer to pay lower fees than higher fees when it comes to your superannuation. However, a fund with higher fees might still offer better value than one with lower fees.

These fees may include:

Administration fees
Investment fees
Advice fees
Switching fees
Buy-sell spread fees
Activity-based fees
Indirect costs
Insurance premiums

2. Investment options

You may want to research the different investment options being offered with different super funds. You want to make sure you’re comfortable with:

The amount of risk you would be taking
The asset classes you would be investing in
How much of your super that would be going to each asset class

3. Investment performance

You may also want to research how each fund's investment options have been performing, such as by looking at their net returns (i.e. after fees). Moneysmart suggests comparing the performance of different funds over the last five years.

4. Insurance options

Super funds commonly offer three different types of insurance:

Life insurance
Total and permanent disability insurance
Income protection insurance

If you’re interested in a super fund with insurance, consider investigating the premiums and conditions.

5. Customer service

You may also want to learn more about what sort of customer service you might receive from different super funds. This might involve comparing the promises made by funds in their marketing with the feedback left on online review sites.

How do you find the best superannuation fund?

The best superannuation fund is the one you believe will offer you the best value. Each person will have their own definition of ‘best’, depending on what they prefer.

For example, you may want to look for:

The fund that has delivered the highest net returns over the past five years
The fund that has earned the highest approval ratings on online review sites
The fund that has the most appealing investment options

Those are just examples – you might have your own definition of what makes for the best super fund.

What is the cheapest superannuation fund?

Identifying the cheapest superannuation fund in Australia is difficult, for two reasons.

First, there are many different types of fees. The same super fund might charge different fees to different members, depending on each member’s balance, activity, investment preferences and insurance preferences. The fees might also differ from person to person. So an apples-for-apples comparison may not always be possible.

Second, there are many different super funds, which may change their fees at any time. Even if you could make an apples-for-apples comparison to find the cheapest super fund, the cheapest fund might change regularly.

How can you apply for superannuation?

Once you’ve chosen what you believe is the best super fund for your situation, contact the fund or visit their website for more information. Joining a super fund is usually a straightforward task.

You apply for superannuation by filling out a standard choice form. You will need to provide:

Personal details
Information about your preferred super fund

Your employer will also need to fill out part of the form.

How much does superannuation cost?

You don’t have to pay money to join a superannuation fund. However, the fund will charge you fees to manage your money, which will be taken out of your super balance.

How can RateCity help you save on superannuation?

You can use RateCity to compare superannuation funds and superannuation products, including:

Investment performance
Fees
Features
SuperRatings awards

You can then use that information to choose what you believe is the best superannuation fund for your situation.

Using RateCity's tables, you can quickly compare the rates of return for various super funds over the past five years, as well as fees, features and benefits. Remembers that a super fund's past return rates do not guarantee that you'll enjoy similar rates of return in the future.

Alex Ritchie

Personal Finance Writer

Alex is a personal finance writer and PR professional at RateCity, and has been writing about finance for over three years. She is passionate about closing the gender pay and superannuation gap, and aims to help young Aussies to overcome their financial apathy and better manage their finances. Alex has been published in numerous print and online outlets, including Money Magazine, Lifehacker Australia, and Business Insider.

Superannuation companies

Today's top super funds

$370

Advisory services
Death insurance
Income protection
Online access

SuperRatings awards

Past 5-year return

6.43%

$78

$463

Advisory services
Death insurance
Income protection
Variety of options

SuperRatings awards

Past 5-year return

6.91%

$92

$497

Advisory services
Death insurance
Income protection
Online access

SuperRatings awards

Past 5-year return

5.50%

$78

$573

Advisory services
Income protection
Variety of options

SuperRatings awards

Past 5-year return

New

Frequently asked questions

A superannuation fund is an institution that is legally allowed to hold and invest your superannuation. There are more than 200 different superannuation funds in Australia. They come in five different types:

Retail funds
Industry funds
Public sector funds
Corporate funds
Self-managed super funds

Retail funds are usually run by banks or investment companies.

Industry funds were originally designed for workers from a particular industry, but are now open to anyone.

Public sector funds were originally designed for people working for federal or state government departments. Most are still reserved for government employees.

Corporate funds are arranged by employers for their employees.

Self-managed super funds are private superannuation funds that allow people to directly invest their money.

Most people can choose their own superannuation fund. However, you might not have this option if you are a member of certain defined benefit funds or covered by certain industrial agreements. If you don’t choose a superannuation fund, your employer will choose one for you.

There are more than 200 different superannuation funds.

Different superannuation funds charge different fees, offer different insurances, offer different investment options and have different performance histories.

So you need to ask yourself these four questions when comparing superannuation funds:

How many fees would I have to pay and what would they cost?
What insurances are available and how much would they cost?
What investment options does it offer? How would they match my risk profile and financial needs?
How have these investment options performed historically?

Opening a superannuation account is simple. When you start a job, your employer will give you what’s called a ‘superannuation standard choice form’. Here’s what you need to complete the form:

The name of your preferred superannuation fund
The fund’s address
The fund’s Australian business number (ABN)
The fund’s superannuation product identification number (SPIN)
The fund’s phone number
A letter from the fund trustee confirming that the fund is a complying fund; or written evidence from the fund stating it will accept contributions from your new employer; or details about how your employer can make contributions to the fund

You might want to provide your tax file number as well – while it’s not a legal obligation, it will ensure your contributions will be taxed at the (lower) superannuation rate.

Superannuation is compulsory. Generally speaking, it can’t be touched until you’re at least 55 years old.

Accessing your superannuation is a simple administrative procedure – you just ask your fund to pay it. You can access your superannuation in three different ways:

Lump sum
Account-based pension
Part lump sum and part account-based pension

However, please note that your superannuation fund will only be able to make a payout if you meet the ‘conditions of release’. The conditions of release say you can claim your super when you reach:

Age 65
Your ‘preservation age’ and retire
Your preservation age and begin a ‘transition to retirement’ while still working

The preservation age has six different categories:

Date of birth	Preservation age
Before 1 July 1960	55
1 July 1960 – 30 June 1961	56
1 July 1961 – 30 June 1962	57
1 July 1962 – 30 June 1963	58
1 July 1963 – 30 June 1964	59
From 1 July 1964	60

There are also seven special circumstances under which you can claim your superannuation:

Compassionate grounds
Severe financial hardship
Temporary incapacity
Permanent incapacity
Superannuation inheritance
Superannuation balance under $200
Temporary resident departing Australia

No, self-employed workers don’t have to pay themselves superannuation. However, if you do pay yourself superannuation, you will probably be able to claim a tax deduction.

Four questions to ask yourself before taking out an SMSF include:

Do I have enough superannuation to justify the higher set-up and running costs?
Am I able to handle complicated compliance obligations?
Am I willing to spend lots of time researching investment options?
Do I have the skill to make big financial decisions?

It’s also worth remembering that ordinary superannuation funds usually offer discounted life insurance and disability insurance. These discounts would no longer be available if you decided to manage your own super.

The amount of superannuation you need to have at retirement is based on how much money you would expect to spend each week during your retirement. That, in turn, depends on whether you expect to lead a modest retirement or a comfortable retirement.

The Association of Superannuation Funds of Australia (ASFA) estimates you would need the following amount per week:

Lifestyle	Singles	Couples
Modest	$465	$668
Comfortable	$837	$1,150

Here is the superannuation balance you would need to fund that level of spending:

Lifestyle	Singles	Couples
Modest	$50,000	$35,000
Comfortable	$545,000	$640,000

These figures come from the March 2017 edition of the ASFA Retirement Standard.

The reason people on modest lifestyles need so much less money is because they qualify for a far bigger age pension.

Here is how ASFA defines retirement lifestyles:

Category	Comfortable	Modest	Age pension
Holidays	One annual holiday in Australia	One or two short breaks in Australia near where you live	Shorter breaks or day trips in your own city
Eating out	Regularly eat out at restaurants. Good range and quality of food	Infrequently eat out at restaurants. Cheaper and less food	Only club special meals or inexpensive takeaway
Car	Owning a reasonable car	Owning an older, less reliable car	No car – or, if you do, a struggle to afford the upkeep
Alcohol	Bottled wine	Casked wine	Homebrew beer or no alcohol
Clothing	Good clothes	Reasonable clothes	Basic clothes
Hair	Regular haircuts at a good hairdresser	Regular haircuts at a basic salon	Less frequent haircuts or getting a friend to do it
Leisure	A range of regular leisure activities	One paid leisure activity, infrequently	Free or low-cost leisure activities
Electronics	A range of electronic equipment	Not much scope to run an air conditioner	Less heating in winter
Maintenance	Replace kitchen and bathroom over 20 years	No budget for home improvements. Can do repairs, but can’t replace kitchen or bathroom	No budget to fix home problems like a leaky roof
Insurance	Private health insurance	Private health insurance	No private health insurance

Before you create a superannuation account, you’ll need to check if you’re allowed to choose your own fund. Most Australians can, but this option doesn’t apply to some workers who are covered by industrial agreements or who are members of defined benefits funds.

Assuming you are able to choose your own fund, the next step should be research, because there are more than 200 different superannuation funds in Australia.

Once you’ve decided on your preferred superannuation fund, head to that provider’s website, where you should be able to fill in an online application or download the appropriate forms. You’ll need your tax file number (assuming you don’t want to be charged a higher tax rate), your contact details and your employer’s details (if you’re employed).

SMSFs have high set-up and running costs
They come with complicated compliance obligations
It takes a lot of time to research investment options
It can be difficult to make such big financial decisions

As a casual employee, you’re entitled to superannuation if:

You’re over 18 and earn more than $450 before tax in a calendar month
You’re under 18, you work more than 30 hours per week and you earn more than $450 before tax in a calendar month

Before you set up a superannuation account, you’ll need to check if you’re allowed to choose your own fund. Most Australians can, but this option doesn’t apply to some workers who are covered by industrial agreements or who are members of defined benefits funds.

Assuming you are able to choose your own fund, the next step should be research, because there are more than 200 different superannuation funds in Australia.

A government co-contribution is a bonus payment from the federal government into your superannuation account – but it comes with conditions. First, the government will only make a co-contribution if you make a personal contribution. Second, the government will only contribute a maximum of $500. Third, the government will only make co-contributions for people on low and medium incomes. The Australian Taxation Office will calculation whether you’re entitled to a government co-contribution when you lodge your tax return. The size of any co-contribution depends on the size of your personal contribution and income.

SMSFs can accept mandated employer contributions from an employer at any time (Funds need an electronic service address to receive the contributions).

However, SMSFs can’t accept contributions from members who don’t have tax file numbers.

Also, they generally can’t accept assets as contributions from members and they generally can’t accept non-mandated contributions for members who are 75 or older.

As a contractor, you’re entitled to superannuation if:

The contract is mainly for your labour
You’re over 18 and earn more than $450 before tax in a calendar month
You’re under 18, you work more than 30 hours per week and you earn more than $450 before tax in a calendar month

Please note that you’re entitled to superannuation even if you have an Australian business number (ABN).

Some superannuation funds will allow you to transfer your insurance cover, without interruption, if you switch. However, others won’t. So it’s important you check before changing funds.

According to the Association of Superannuation Funds of Australia (ASFA), here is how much you would be able to spend per week during retirement:

Lifestyle	Singles	Couples
Modest	$465	$668
Comfortable	$837	$1,150

Here is the superannuation balance you would need to fund that level of spending:

Lifestyle	Singles	Couples
Modest	$50,000	$35,000
Comfortable	$545,000	$640,000

These figures come from the March 2017 edition of the ASFA Retirement Standard.

The reason people on modest lifestyles need so much less money is because they qualify for a far bigger age pension.

Here is how ASFA defines retirement lifestyles:

Category	Comfortable	Modest	Age pension
Holidays	One annual holiday in Australia	One or two short breaks in Australia near where you live	Shorter breaks or day trips in your own city
Eating out	Regularly eat out at restaurants. Good range and quality of food	Infrequently eat out at restaurants. Cheaper and less food	Only club special meals or inexpensive takeaway
Car	Owning a reasonable car	Owning an older, less reliable car	No car – or, if you do, a struggle to afford the upkeep
Alcohol	Bottled wine	Casked wine	Homebrew beer or no alcohol
Clothing	Good clothes	Reasonable clothes	Basic clothes
Hair	Regular haircuts at a good hairdresser	Regular haircuts at a basic salon	Less frequent haircuts or getting a friend to do it
Leisure	A range of regular leisure activities	One paid leisure activity, infrequently	Free or low-cost leisure activities
Electronics	A range of electronic equipment	Not much scope to run an air conditioner	Less heating in winter
Maintenance	Replace kitchen and bathroom over 20 years	No budget for home improvements. Can do repairs, but can’t replace kitchen or bathroom	No budget to fix home problems like a leaky roof
Insurance	Private health insurance	Private health insurance	No private health insurance

First home buyers are the only people who can use their superannuation to buy a property. The federal government has created the First Home Super Saver Scheme to help first home buyers save for a deposit. First home buyers can make voluntary contributions of up to $15,000 per year, and $30,000 in total, to their superannuation account. These contributions are taxed at 15 per cent, along with deemed earnings. Withdrawals are taxed at marginal tax rates minus a tax offset of 30 percentage points.

Voluntary contributions to the First Home Super Saver Scheme are not exempt from the $25,000 annual limit on concessional contributions. So if you pay $15,000 per year into the First Home Super Saver Scheme, you have to make sure that you don’t receive more than $10,000 in superannuation payments from your employer and any salary sacrificing.