Compare the different types of Superannuation funds in Australia

Learn how you can start planning for your retirement. RateCity compares superannuation products from 100 Australian Superannuation funds. Compare the different super fund types with RateCity. - Last updated on 31 Jul 2019

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If you’re joining a super fund for the first time or looking to switch funds, it’s worth considering the different types of superannuation funds out there and the features of each.

There are lots of superannuation funds to choose from, so you don’t just have to pick the most common fund or your employer’s chosen fund. Taking the time to do some research and choose the best fund for your needs can have a big impact on your financial standing during retirement.

What is a superannuation fund?

Superannuation (commonly known as ‘super’) is money that’s put aside and invested while you’re working so you’ll have money to live off when you retire. A super fund operates as a trust where your money is collected with other members' money and invested on your behalf by a trustee. Generally, you will not be able to access your super money until you retire.

If you’re employed, your employer will make contributions to your chosen super fund on your behalf, and you can also make additional voluntary contributions of your own. If you’re a low-income earner, the government may also make contributions to your super fund for you.

What are the types of superannuation funds?

Understanding the different types of super funds will make it easier to choose one that’s right for you. Each superannuation fund falls into one of the following categories:

MySuper

MySuper funds are a replacement for existing default accounts offered by super funds. Your employer must pay your employer contributions into a MySuper account if you don’t nominate a fund yourself. Different types of funds (such as industry funds and public sector funds) may offer MySuper accounts.

MySuper accounts typically offer:

  • Lower fees
  • Simple features so you don't pay for services you don't need
  • Life insurance unless otherwise requested

This type of fund allows you to manage your investments into two ways:

  • Single diversified investment strategy – Your money is put in a standard mix of investments with the same risk-reward approach for your whole life.
  • Lifecycle investment strategy – Your money is moved from growth investments when you're younger to more conservative investments when you're older. This allows you to take on more risk when you’re younger and can afford to wait out the peaks and troughs of the market.

Retail funds

Retail funds are commonly run by banks or investment companies, and they can usually be joined by anyone. The fund’s shareholders expect to receive a return on their investment, and a percentage of the profits of these retail super funds goes to the shareholders. Common features include:

  • A large number of investment options, which could be beneficial if you want more control over where your money is invested
  • Mid to high fees
  • Usually accumulation funds

Industry funds

Some industry funds are restricted to employees in a specific industry, whereas other larger funds are open to anyone. Common features include:

  • Operating as ‘not-for-profit’, which means any profits earned are invested back into the fund for the benefit of members
  • Relatively low fees
  • Low number of investment options, which may still be sufficient for the average person
  • Usually accumulation funds

Public sector funds

Most public sector super funds are only open to government employees. Common features include:

  • Contributions above the required minimum, in some cases
  • Low fees
  • Profits put back into the fund for the benefit of members
  • Defined benefits funds for some longer-term members, and accumulation funds for newer members

Corporate funds

Corporate funds are set up by employers for employees and may have an employer who also operates the fund under a board of trustees. They can also be included as a separate part of a large retail or industry super fund. Common features include:

  • Low to mid cost for big company funds, and a higher cost for smaller employers
  • A wide range of investment options for those that are part of a larger fund
  • Both defined benefits funds and accumulation funds
  • A mix of not-for-profit and for-profit funds

Eligible rollover funds

Eligible rollover funds (ERFs) are holding accounts for lost or inactive members with a low account balance. These funds vary in terms of fees and returns, and can be consolidated with active super funds.

Self-managed super funds

A self-managed super fund (SMSF) offers full control over where your money is invested. An SMSF is a private superannuation fund that you manage yourself, and is regulated by the Australian Taxation Office (ATO).

These funds are generally only suitable for people with a thorough understanding of the financial and legal responsibilities of managing a super fund. Set-up and running costs can be expensive, so it’s usually worth the cost only if you have a large balance.

What’s the difference between accumulation funds and defined benefits funds?

Today, most types of superannuation funds are accumulation funds. They’re called ‘accumulation’ funds because your money grows over time. Factors affecting the value of your accumulation fund super include:

  • Your employer contributions
  • Your voluntary contributions
  • How much you receive in bonus contributions
  • How much your fund earns from investing your super
  • Fees charged
  • Your chosen investment options

Defined benefit funds, on the other hand, are uncommon corporate or public sector funds. They’re called ‘defined benefit’ because you get paid a set amount (based on a formula) once you retire. Most defined benefit funds are closed to new members. Factors affecting your defined benefit fund super value include:

  • Your employer contributions
  • Your voluntary contributions
  • Your length of employment
  • Your salary at retirement

In many cases, it’s advisable to stay with a defined benefit fund rather than switching to an accumulated fund. However, every fund is different, so it’s worth talking to a professional if you’re part of a defined benefit fund and thinking about changing.

What happens to my super money?

Regardless of the type of fund you’re a member of, your super money will be invested by your super fund’s trustee. Investment options differ between funds, but usually include a mix of different asset categories, as well as single-sector options such as cash, property and shares.

Returns on your investment will depend on the investment options you choose, so it’s important to consider what’s best for your circumstances. For example, if you’re under 30, you might be willing to take on higher-risk investments and transition to more stable investments as you move towards retirement.

When you retire, you can choose to access your super money as a lump sum, a regular income stream, or a combination of both.

How to choose a superannuation fund

When choosing a new super fund, consider:

  • The pros and cons of your current fund (if you have one)
  • Your current financial standing
  • The industry in which you’re employed and the types of funds available to you
  • Your knowledge of financial markets
  • How long you have until retirement

Every type of fund is different, so it’s important consider the benefits and drawbacks of each given your circumstances. Compare superannuation funds for your age, current super balance and preferences to find one that works for you.


​Nick Bendel is a senior property and personal finance writer for RateCity, and an experienced journalist with numerous writing credits to his name. To date. He covers property, home loans, credit cards, superannuation and other bank products, and loves getting elbow-deep in the latest ABS, APRA and RBA data.​


^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.

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