Whether you’re comparing your superannuation options or have been offered a new role that comes with corporate superannuation, choosing the right super fund for your financial situation and your industry can be a fun yet challenging experience.

This is where RateCity lends a helping hand. Here is everything you need to know about corporate super and its benefits and disadvantages.

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Past 5-year return
5.58%
Admin fee

$78

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MLC
Calc fees on 50k

$913

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MyChoice Platinum
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Past 5-year return
5.97%
Admin fee

$92

Company
smartMonday
Calc fees on 50k

$622

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MyChoice Platinum
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Past 5-year return
5.92%
Admin fee

$180

Company
IOOF
Calc fees on 50k

$1.1k

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MyChoice Gold
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Past 5-year return
4.67%
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$0

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Netwealth
Calc fees on 50k

$563

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MyChoice Gold
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Past 5-year return
5.70%
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$0

Company
Qantas Super
Calc fees on 50k

$660

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MyChoice Gold
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Past 5-year return
5.32%
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$78

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Russell Investments
Calc fees on 50k

$646

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MyChoice Gold
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Past 5-year return
5.10%
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$0

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Suncorp Bank
Calc fees on 50k

$495

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MyChoice Gold
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Past 5-year return
5.80%
Admin fee

$78

Company
Twusuper
Calc fees on 50k

$653

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Learn more about superannuation

What is a corporate super fund?

There are two main types of super funds in Australia: defined benefit funds and accumulation funds, with the latter being the most common. Within these are various super categories (explained further in guide). One of which is corporate super.

Corporate superannuation is a category of super funds offered by corporations, like Telstra, and are available to employees of said corporation. If the corporate super fund has great returns and offers even more benefits to its employees, it can help a corporation stay competitive for employees in the industry.

Corporate super funds are generally available to ex-employees and even relatives of current employees. Super Guide notes that funds run by the employer, or an industry fund, are generally “not-for-profit” and “low to medium cost, especially for large corporates”. Further, most are “accumulation funds, but some older funds may be defined benefit”.

What superannuation types are available?

As mentioned above, the two main types of superannuation are accumulation funds and defined benefit funds.

According to ASIC’s MoneySmart, here are the fundamental differences:

Accumulation funds

"In an accumulation fund, your money grows or 'accumulates' over time. The value of your super depends on the money that you and your employers put in (known as super contributions), and on the investment return generated by the fund.”

Defined benefit funds

“In a defined benefit fund, your retirement benefit is determined by a formula instead of being based on investment return. Most defined benefit funds are corporate or public sector funds. Many are now closed to new members. Typically, your benefit is calculated using:

  • the money put in by you and your employer
  • your average salary over the last few years before you retire
  • the number of years you worked for your employer”

What superannuation categories are there?

Within these two main super fund types, there are a few categories your fund may fall into: corporate, retail, industry or public sector.

  • Retail super funds. Retail funds are run by banks and other financial institutions, such as Commonwealth Bank, ANZ, Westpac, and more. They help to generate profits for shareholders. They tend to come with a wide range of investment options but may be recommended by financial advisors being paid commissions or fees.
  • Industry super funds. Industry super funds were first established in the 1980s to protect Australian workers within certain industries from the types of fees and commission products found in retail super funds. In fact, industry super funds do not pay commissions or incentives to financial advisers. Anyone can join the larger industry funds, with smaller industry funds typically operating only for those working with in certain industries.
  • Public sector super funds. Also called government super funds, as the name suggests public sector funds are for government employees. They are not available for non-government employees. They are a competitive fund type due to their perceived benefits, including some employers contributing more than the 9.5 per cent super guarantee minimum, long term members have defined benefits, lower fees on average and a modest range of investment choices.
  • Corporate super funds. As noted above, corporate super funds are organised by employers for their employees and can be a competitive draw for the organisation when trying to bring in talent. The corporate fund is generally kept available for ex-employees and current employee family members. Some corporate super funds may be managed by larger funds and come with a wider range of investment options.

You may also choose to instead opt for a self-managed super fund (SMSF). This is a personal superannuation account that gives the individual complete control over the investment strategy of the funds. SMSFs have similar benefits to the professionally managed funds listed above, such as concessional tax rates.

What are the benefits of corporate super funds?

As an employer, having a corporate super fund can help you to remain competitive within your industry as a highly recommended corporate super fund can be a draw for talented employees.

For employees, you can choose to be more selective about who you work for if you factor in the rate of return, fees and benefits associated with a corporation’s super fund into your job search.

A corporate super fund may also offer automatic life insurance and total and permanent disability (TPD) insurance. According to Atlus Financial, some funds even include “income protection without medical underwriting, and this benefit usually stays with employees as long as they’re employed by you”.

Employees in corporate super funds may also take advantage of additional benefits, such as discounted gym memberships, health insurance and travel insurance discounts and more. Be sure to read the product disclosure statement of a corporate super fund for a full break down of any fees and perks before applying.

Much like any super fund, it’s crucial that you compare the investment options, fees and insurance offered before you commit. Just because a company is up-selling its corporate super fund, doesn’t mean you shouldn’t do your own research.

What are the disadvantages of corporate super funds?

While the exclusivity of a corporate super fund can be a huge draw for employees, it can also be a disadvantage. Some corporations will not allow ex-employees to participate in the funds. By being forced to switch funds, you may be hit with an exit fee from the corporate super fund. 

Further, if you’re not planning on sticking around with the company for a few years as a minimum, this type of fund may not suit your financial situation. You may miss out on high returns by switching funds so frequently. By making yourself an ex-employee, you're potentially losing out on the employee benefits associated with your corporate super account, as well as any fee discounts. 

Further, employees who leave a corporate super fund will need to double check their insurance policies and insurance cover through the fund. By switching to a new fund, you may not receive the same cover – especially if you have a pre-existing medical condition or are aged 60 or over.

If you’re unsure whether switching super funds or choosing a corporate super fund is the right financial decision for you and your family, consider seeking independent financial advice from a financial adviser.

Frequently asked questions

What is a superannuation fund?

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.

What is the difference between accumulation and defined benefit funds?

A majority of Australians are in accumulation funds. These funds grow according to the amount of money invested and the return on that money.

A minority of Australians are in defined benefit funds – many of which are now closed to new members. These funds give payouts according to specific rules, such as how long the worker has been with their employer and their final salary before they retired.

How many superannuation funds are there?

There are more than 200 different superannuation funds.

What superannuation details do I give to my employer?

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 should also provide your tax file number – while it’s not a legal obligation, it will ensure your contributions will be taxed at the (lower) superannuation rate.

What happens to my insurance cover if I change superannuation funds?

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.

What are ethical investment superannuation funds?

Ethical investment funds limit themselves to making ‘ethical’ investments (which each fund defines according to its own principles). For example, ethical funds might avoid investing in companies or industries that are linked to human suffering or environmental damage.

How do you create a superannuation account?

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).

Do I have to pay myself superannuation if I'm self-employed?

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.

What are reportable superannuation contributions?

For employees, there are two types of reportable superannuation contributions:

  • Reportable employer super contributions your employer makes for you
  • Personal deductible contributions you make for yourself

How does superannuation affect the age pension?

Most Australians who are of retirement age can qualify for the age pension. However, depending on the size of your assets and post-retirement income, you might be entitled to only a reduced pension. In some instances, you might not be entitled to any pension payments.

Can I choose a superannuation fund or does my employer choose one for me?

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.

What should I know before getting an SMSF?

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

  1. Do I have enough superannuation to justify the higher set-up and running costs?
  2. Am I able to handle complicated compliance obligations?
  3. Am I willing to spend lots of time researching investment options?
  4. 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.

Am I entitled to superannuation if I'm not an Australian citizen?

Yes, permanent and temporary residents are entitled to superannuation.

Is superannuation taxed?

Superannuation is taxed. It is generally taxed at 15 per cent. However, if you earn less than $37,000, you will be automatically reimbursed up to $500 of the tax you paid. Also, if your income plus concessional superannuation contributions exceed $250,000, you will also be charged Division 293 tax. This is an extra 15 per cent tax on your concessional contributions or the amount above $250,000 – whichever is lesser.

How is superannuation calculated?

Superannuation is calculated at the rate of 9.5 per cent of your gross salary and wages. So if you had a salary of $50,000, your superannuation would be 9.5 per cent of that, or $4,750. This would be paid on top of your salary.

The ‘superannuation guarantee’, as it is known, has been at 9.5 per cent since the 2014-15 financial year. It is scheduled to rise to 10.0 per cent in 2021-22, 10.5 per cent in 2022-23, 11.0 per cent in 2023-24, 11.5 per cent in 2024-25 and 12.0 per cent in 2025-26.

How do I set up an SMSF?

Setting up an SMSF takes more work than registering with an ordinary superannuation fund. 

An SMSF is a type of trust, so if you want to create an SMSF, you first have to create a trust.

To create a trust, you will need trustees, who must sign a trustee declaration. You will also need identifiable beneficiaries and assets for the fund – although these can be as little as a few dollars.

You will also need to create a trust deed, which is a document that lays out the rules of your SMSF. The trust deed must be prepared by a qualified professional and signed by all trustees.

To qualify as an Australian superannuation fund, the SMSF must meet these three criteria:

  • The fund must be established in Australia – or at least one of its assets must be located in Australia
  • The central management and control of the fund must ordinarily be in Australia
  • The fund must have active members who are Australian residents and who hold at least 50 per cent of the fund’s assets – or it must have no active members

Once your SMSF is established and all trustees have signed a trustee declaration, you have 60 days to apply for an Australian Business Number (ABN).

When completing the ABN application, you should ask for a tax file number for your fund. You should also ask for the fund to be regulated by the Australian Taxation Office – otherwise it won’t receive tax concessions.

Your next step is to open a bank account in your fund’s name. This account must be kept separated from the accounts held by the trustees and any related employers.

Your SMSF will also need an electronic service address, so it can receive contributions.

Finally, you will need to create an investment strategy, which explains how your fund will invest its money, and an exit strategy, which explains how and why it would ever close.

Please note that you can pay an adviser to set up your SMSF. You might also want to take the Self-Managed Superannuation Fund Trustee Education Program, which is a free program that has been created by CPA Australia and Chartered Accountants Australia & New Zealand.

How do I choose the right superannuation fund?

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?

How can I increase my superannuation?

You can increase your superannuation through a ‘salary sacrifice’. This is where your employer takes part of your pre-tax salary and pays it directly into your superannuation account. Like regular superannuation contributions, salary sacrifices are taxed at 15 per cent when they are paid into the fund.

Is superannuation paid on unused annual leave?

If your employment is terminated, superannuation will not be paid on unused annual leave.

How much extra superannuation can I add to my fund?

There is an annual limit of $25,000 for concessional contributions – that is, money paid by your employer and extra money you pay into your account through salary sacrificing. There is also a limit on non-concessional contributions. Australians aged between 65 and 74 have a limit of $100,000 per year. Australians aged under 65 have a limit of $300,000 every three years.