WHAT
IS
Superannuation?

Superannuation, often simply called “super”, is a way of saving money for your retirement. It’s like a special savings account that you can’t touch until you retire, but it’s managed differently from a regular bank account.

Here’s how it works:

1. Contributions: Throughout your working life, a portion of your salary is automatically put into a superannuation fund by your employer. You can also add extra money to this fund yourself.

2. Investments: The money in your super fund doesn’t just sit there—it’s invested in things like shares, Managed Funds, ETF’S bonds, and property. The idea is that over time, these investments will grow, increasing the amount of money you’ll have when you retire. Not all super funds allow all available investments.

3. Tax Benefits: Superannuation often comes with tax benefits. For example, the money you put into your super fund might be taxed at a lower rate than your regular income, which can help your savings grow faster.

4. Accessing Your Super: You generally can’t access the money in your super fund until you reach a certain age, usually your retirement age, but reaching preservation age can also unlock other benefits. When you retire, you can start drawing money from your super to live on.

5. Retirement Income: Once you retire, your super fund can provide you with an income to support your living expenses. Some people take out a lump sum, while others opt for regular payments, like a pension.

Superannuation is important because it helps ensure you have enough money to live on when you stop working. By saving and investing
throughout your career, your super can grow into a significant amount, providing financial security in your later years.

There are over 500 super funds in Australia

Super fund categories

Most super funds fall into one of the following categories:

Click on one of the icons below to learn more.

Retail

INDUSTRY
PUBLIC SECTOR
CORPORATE

Retail super funds

Retail funds are usually run by banks or investment companies. Anyone can join.

Main features:
They often have a wide range of investment options.
• They may be recommended by financial advisers who may charge a fee for their advice.
• Most range from medium to high cost, but many offer a low-cost or MySuper alternative.
• The company that owns the fund aims to keep some profit.

Industry super funds

Anyone can join the bigger industry funds. Smaller funds may only be open to people working in a certain industry, for example, health.

Main features:
• Most industry funds are accumulation funds. A few older industry funds still have defined benefit members.
• They generally range from low to medium cost, and most offer MySuper products.
• They are profit-for-member funds, which means profits are put back into the fund.

Public sector super funds

Public sector funds are for government employees.

Main features:
• They usually have a modest range of investment choices.
• Newer members are usually in an accumulation fund. Many long-term members have defined benefits.
• They generally have low fees and some offer MySuper products.
• Profits are put back into the fund.

Corporate super funds

A corporate fund is arranged by an employer for their employees.
Some large companies operate a corporate fund under a board of trustees who they appoint. Other corporate funds are operated by a retail or
industry fund, but are only available to that company’s employees.

Main features:
• Those managed by a bigger fund may offer a wider range of investment options.
• Some older corporate funds have defined benefit members, but most others are accumulation funds.
• They are generally low to medium cost funds for large employers, but may be high cost for small employers.
• Corporate funds run by the employer or an industry fund will usually return all profits to members. Those run by retail funds will keep some profits.

Retail super funds

Retail funds are usually run by banks or investment companies. Anyone can join.

Main features:

  • They often have a wide range of investment options.
  • They may be recommended by financial advisers who may charge a fee for their advice.
  • Most range from medium to high cost, but many offer a low-cost or MySuper alternative.
  • The company that owns the fund aims to keep some profit.

Industry super funds

Anyone can join the bigger industry funds. Smaller funds may only be open to people working in a certain industry, for example, health.

Main features:

  • Most industry funds are accumulation funds. A few older industry funds still have defined benefit members.
  • They generally range from low to medium cost, and most offer MySuper products.
  • They are profit-for-member funds, which means profits are put back into the fund.

Public sector super funds

Public sector funds are for government employees.

Main features:

  • They usually have a modest range of investment choices.
  • Newer members are usually in an accumulation fund. Many long-term members have defined benefits.
  • They generally have low fees and some offer MySuper products.
  • Profits are put back into the fund.

Corporate super funds

A corporate fund is arranged by an employer for their employees.
Some large companies operate a corporate fund under a board of trustees who they appoint. Other corporate funds are operated by a retail or
industry fund, but are only available to that company’s employees.

Main features:

  • Those managed by a bigger fund may offer a wider range of investment options.
  • Some older corporate funds have defined benefit members, but most others are accumulation funds.
  • They are generally low to medium cost funds for large employers, but may be high cost for small employers.
  • Corporate funds run by the employer or an industry fund will usually return all profits to members. Those run by retail funds will keep some profits.