In the past, employers provided a Superannuation fund to all employees, but since 2005, Australians have been able to choose the fund that their employers pay into. If you are just entering the work force or starting a rest superannuation contact, you may find the array of choices overwhelming. First, make sure you understand what your employer offers, and then consider which of the following types of funds are most suitable for you.
MySuper is a default account that your employer must pay into if you don’t make a choice. A MySuper account typically has lower fees and simpler features, and life insurance may be included on an opt-out basis.
Self-managed super funds can be owned by up to four members, and all members are responsible for managing the investments. This type of fund is only beneficial for investors who can open the account with a large sum of money and who have the time, knowledge, and expertise to manage the fund wisely, arrange regular audits, and document all activity. Self-managed funds involve more fees than other types of funds because the owners are responsible for not only the cost of the investments, but also accounting, tax advice or preparation, and auditing.
Retail funds are run by financial institutions that take a profit. They are accumulation funds that are open to anyone, and they usually offer many different investment options. They are managed funds sold by financial advisors who charge a fee (most often) or a commission. Wholesale master trusts are retail funds designed for groups of employees rather than individuals.
Public sector funds are for government employees only. They are non-profit funds with low fees and employer contributions tend to be larger. There are both defined-benefit and accumulation public sector funds, but most new members have the latter. Like industrial funds, the range of investment options is limited.
Corporate funds are funds that are set up by a company specifically for its employees. The fees depend on the size of the company, with larger companies being able to offer lower fees. Some corporate funds are managed by larger funds and can offer a variety of options.
Industry funds are for employers in a certain industry, though some of the larger funds are available for anyone. These funds are also usually accumulation funds, but they typically cost less than retail funds do. Industry funds offer a smaller range of investment options than retail funds. Unlike retail funds, these funds reinvest profits. NSF Super is a multi industry super fund that returns benefits to members. For more information about this fund.