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.