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Home Super & retirement Why legalsuper What to consider when choosing a super fund

What to consider when choosing a super fund

How can you be sure you’re with the right fund for your needs? Take a look at the different ways to compare super funds and what factors to consider when finding the right fund for you.

Which super fund is best?

There's no easy answer and no one size fits all for super funds. The best super fund for you is the one that has the benefits and features you want, and invests your money in a cost-effective way. It should leave you feeling comfortable in how it's governed and regulated, and give you the knowledge & information you need to work towards your retirement goals. While comparison sites can be helpful,  it's best not to rely solely on them.  It's important to take the time to do your homework when choosing a super fund.

How can you be sure you’re with the right fund for your needs? 

Take a look at the different ways to compare super funds and what factors to consider. 

Types of super funds

Choosing the right type of super fund

Not all super funds are made the same. There are different types of funds, which are governed by different rules and regulations. 

Type of fundDescription
Corporate fundA corporate fund is created by an employer, for its employees. You can generally only join if you work for that employer or company.
Industry fundA super fund originally established to provide for the retirement of workers from a specific industry. Industry super funds are profit-to-member funds. They are membership-based and do not have shareholders.
Retail fundCorporations, banks and insurance companies use retail super funds to generate corporate profits, which are returned as dividends to shareholders. The big banks own most of the large retail super funds.
Public Sector fundMost public sector funds are open to government employees and are profit-to-member funds. Many long-term members of public sector funds have defined benefits, while new members are usually in accumulation funds. Some employers contribute more than the 9.5% minimum to public sector funds.
Self-managed super fund (SMSF)A SMSF is a private superannuation fund you manage yourself, regulated by the Australian Taxation Office. Generally, members of SMSFs are also the Trustees. The members of the SMSF run it for their own benefit and are responsible for complying with super and tax laws.

What to compare

What to look forWhy it’s important
Choice of fund & ContributionsYour employer may pay more than 9.5% if you join a certain fund. If you choose your own fund, check that it will accept super contributions from your employer.
Fees & costsAll super funds charge fees, and higher fees do not necessarily mean higher returns. Every dollar you pay in fees can make a big difference to how much you end up with. It’s important to know what you're paying for and to work out the net benefit after considering investment performance. Pay attention to factors like how often the fees will be charged to your account.
Investment optionsDepending on the super fund, you can usually choose how your money is invested. Your investment choice is likely to depend on your risk tolerance and age. Different options might have different costs - make sure the fund you're looking at has a range of options which will suit your changing needs.
Investment performanceSuper is a long-term investment. Look at how each fund has performed historically over the long term (5 or 10 years). Compare funds with the same investment strategy and take into account fees and costs. Take note of the period the investment returns relate to and compare like with like.
(For example, a 5-year average return for the period ending 30 June 2017 may be different from a 5-year average return for the period ending 30 September 2018.)
InsuranceSee what insurance is available and what it costs. If you are thinking about switching super funds, it’s important that you’re insured by your new super fund before you transfer your money.
Environmental, Social and Governance (ESG) criteriaIf you would like your super fund to reflect your values, you may want to investigate their stance on ESG in relation to investments, and the funds own governance.
Transparency & governanceIt’s important to trust that your super fund is being governed fairly and with transparency. Generally, a fund’s annual report will give some insights into the fund's governance.
Service offeringCall the fund or browse their website to see what services they offer. If you have a preference for communicating a particular way, for example: online, or in-person – make sure the fund offers your preference.
Other benefitsSome funds offer extra benefits, such as special insurance, bank loan discounts, or events.

Check if you can choose your fund

Most people can choose the super fund they want their employer to contribute to. However, in some circumstances employees may not have this choice. For example - under an industrial agreement or defined benefit members. The best way to find out if you can choose your own super fund is to ask your employer.