Showing superannuation funds based on investment performance of
and a super balance of
Past 5-year return
8.38

% p.a

FYTD return

13.70

% p.a

Company
Calc fees on 50k

$513

Features
Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
SuperRatings awards
SuperRatings Platinum 2021 MyChoice Super
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Superannuation funds we compare at RateCity

Learn more about superannuation

What is an industry super fund?

If you’ve been comparing and researching superannuation funds, you’ve probably come across industry superannuation funds.

First established in the 1980s, industry super funds were intended to protect Australian workers in certain industries from high fees and commission products most commonly found in retail superannuation funds.

Back in the day, industry super funds were usually only open to members who worked in particular industries. These days, the larger industry super funds are open to anyone. However, there are some smaller industry super funds that are still restricted to employees in specific industries.

Unlike retail super funds, industry super funds don’t pay commissions or incentives to financial planners or financial advisers. Industry funds are not-for-profit organisations and are run to benefit members. As profits go back into the fund, industry super funds tend to have lower management fees than other types of retail (or for-profit) super funds. When it comes to governance, industry super funds are usually governed by trustee boards made up of both employers and employees.

Most industry super funds tend to be accumulation funds. Accumulation-style super works similarly to a regular bank account where the balance of your industry super account is built up by the deposits you make into it.

Funds are accumulated into industry super funds by way of:

  • compulsory employer contributions;
  • any additional contributions you make;
  • spouse contributions, or;
  • government co-contributions.

Your super contributions are then invested by your industry super fund into an investment option, either chosen by you, or chosen by your industry super fund as a default investment.

What is superannuation?

Superannuation (or ‘super’) is money paid into a specialised fund to go towards your retirement. By regularly investing money in a superannuation fund over the course of your career, you can build up a superannuation balance to enjoy when you retire.

To deal with an increasingly ageing population and reduce reliance on the government pension, superannuation became compulsory in Australia in 1992. Prior to this, retirees were relying on a mixture of their savings and the government pension to maintain a quality of life in retirement.

The current superannuation rate, known as the superannuation guarantee, is 9.5 per cent, which the government is set to gradually increase up to 12 per cent by 2025.

If you’re an employee, your employer must pay compulsory contributions of at least the superannuation guarantee rate. These contributions come from your pre-tax salary, and are deposited into your nominated super fund, whether it’s an industry super fund or another type. Regardless of whether you’re a full-time, part-time or casual employee, if you fit the criteria, your employer must make compulsory superannuation contributions on your behalf.

In addition to mandatory employer contributions, you also have the option of making voluntary contributions to your super account balance. There are limits to the amount of pre-tax income you can contribute into your super, so check with a financial adviser before you make any additional super contributions.

While superannuation is currently compulsory for employees in Australia, if you’re self-employed, you can still choose to open an industry super fund, but the responsibility is on you to make voluntary contributions to your account.

Pros and cons of industry super funds

When comparing the benefits and drawbacks of industry super funds, and how they stack up against other types of super funds, like retail or SMSF options, here’s what you need to know:

Pros

  • May suit time-poor workers: Industry super funds may suit Australian workers who don’t have the time or resources to manage their own super.
  • Often have fewer fees: As industry super funds are non-profit, with profits deposited back into the fund to benefit the members, they tend to have fewer fees than retail funds.
  • Simple, no-frills options available: Some industry super funds offer MySuper accounts, which are no-frills options offering lower fees and simple, easy-to-understand features.

Cons

  • May have fewer investment options: Industry super funds may have fewer types of investment options than funds offered by other financial institutions. While this may not be an issue for some people, those wanting more flexibility and diversification in their investment strategy might want to also compare either a retail super fund or a SMSF.
  • May have hands-off advice and assistance: When it comes to advice, financial services and other ongoing assistance, industry super funds tend to be less hands-on than retail funds. That’s not to say you’ll get no support, though if you’re looking for a super fund that offers more advice and interaction, you may want to also investigate other, more hands-on options.

How to compare industry super funds?

With so many different super funds on the market, comparing industry super funds and working out which one may suit your needs can be confusing. When comparing industry super funds, here’s what you need to know:

  • Investment options: Historically, industry super funds have offered fewer options than other types of super funds, but this has changed in recent years. Some people prefer to pick their own investments, so if you want this flexibility, search for an industry super fund that suits your preference.
  • Performance: While past performance is never a reliable indicator of future performance, it can help give you a rough idea of the type of investment returns you might be able to expect from your industry super fund. Compare the past five years of investment performance for different funds to get an idea of where you could potentially stand.
  • Fees and charges: Ongoing costs and maintenance fees can add up over the long term. As industry super funds invest profits back into the fund, this generally means that low-cost industry super funds have low fees and/or charge fewer fees than other retail or for-profit funds. With any superannuation fund, compare the fees and charges to the features and benefits, and consider whether the cost of fees will make an impact on your super balance, so you can be confident you’re getting what you pay for.
  • Insurance: These days, it’s common for super funds to offer insurance as an option within the fund. When you’re comparing industry super funds, check what insurances are on offer and whether the level of cover stacks up to policies held outside an industry super fund. An advantage of holding insurance within an industry super fund is that policies like life insurance, total and permanent disability (TPD) insurance, and income protection insurance are usually discounted. Also, premiums on insurances offered through an industry super fund are usually deducted from your super account, which can be tax effective in some cases.

Superannuation is a long-term investment designed to support you well into your retirement. Some people can compare super funds and still feel overwhelmed or uncomfortable deciding which fund works best for them and their financial situation. In that instance, a financial adviser or financial planner may be able to help you narrow down your options and provide financial advice. Before making any decisions, it always pays to do your research, read the product disclosure statement (PDS) and compare your options.

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.

How many superannuation funds are there?

There are more than 200 different superannuation funds.

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 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 do you set up superannuation?

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.

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).

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).

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?

What is an SMSF?

An SMSF is a self-managed superannuation fund. SMSFs have to follow the same rules and restrictions as ordinary superannuation funds.

SMSFs allow Australians to directly invest their superannuation, rather than let ordinary funds manage their money for them.

SMSFs are regulated by the Australian Taxation Office (ATO). They can have up to four members. All members must be trustees (or directors if there is a corporate trustee).

Unlike with ordinary funds, SMSF members are responsible for meeting compliance obligations.

What fees do superannuation funds charge?

Superannuation funds can charge a range of fees, including:

  • Activity-based fees – for specific, irregular services, such as splitting an account after a divorce
  • Administration fees – to cover the cost of managing your account
  • Advice fees – for personal investment advice
  • Buy/sell spread fees – when you make contributions, switches and withdrawals
  • Exit fees – when you close your account
  • Investment fees – to cover the cost of managing your investments
  • Switching fees – when you choose a new investment option within the same fund

How do you open a superannuation account?

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.

How do I change my superannuation fund?

Changing superannuation funds is a common and straightforward process. You can do it through your MyGov account or by filling out a rollover form and sending it to your new fund. You’ll also have to provide proof of identity.

How long after divorce can you claim superannuation?

You or your partner could be forced to surrender part of your superannuation if you divorce, just like with other assets.

You can file a claim for division of property – including superannuation – as soon as you divorce. However, the claim has to be filed within one year of the divorce.

Your superannuation could be affected even if you’re in a de facto relationship – that is, living together as a couple without being officially married.

In that case, the claim has to be filed within two years of the date of separation.

Either way, the first thing to consider is whether you’re a member of a standard, APRA-regulated superannuation fund or if you’re a member of a self-managed superannuation fund (SMSF), because different rules apply.

Standard superannuation funds

If your relationship breaks down, your superannuation savings might be divided by court order or by agreement.

The rules of the superannuation fund will dictate whether this transfer happens immediately, or in the future when the person who has to make the transfer is allowed to access the rest of their superannuation (i.e. at or near retirement).

Click here for more information.

SMSFs

If your relationship breaks down, you must continue to observe the trust deed of your SMSF.

So if you and your partner are both members of the same SMSF, neither party is allowed to use the fund to inflict ‘punishment’ – such as by excluding the other party from the decision-making process or refusing their request to roll their money into another superannuation fund.

This no-punishment rule applies even if the two parties are involved in legal proceedings.

Click here for more information.

Financial consequences

Superannuation funds often charge a fee for splitting accounts after a relationship breakdown.

Splitting superannuation can also impact the size of your total super balance and how your super is taxed.

Click here for more information.

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.

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.

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.

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 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

Can I buy a house with my superannuation?

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.

What happens to my superannuation when I change jobs?

You can keep your superannuation fund for as long as you like, so nothing happens when you change jobs. Please note that some superannuation funds have special features for people who work with certain employers, so these features may no longer be available if you change jobs.

How do I combine several superannuation accounts into one account?

The process used to consolidate several superannuation accounts into one is the same process used to change superannuation funds. This can be done through your MyGov account or by filling out a rollover form and sending it to your chosen fund.