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Superannuation Fund Types

Finding the right-for-you superannuation fund type

Superannuation Fund TypesMost superannuation fund types fall into one of the following categories: retail, industry, public sector, corporate or, self-managed (SMSF).

Retail superannuation 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 although many offer a low-cost or MySuper alternative.
  • The company that owns the fund aims to keep some profit.
Industry superannuation funds

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

Main features:

  • Most industry funds are accumulation funds, although there remains a few older industry funds that 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 only.

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 superannuation 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. On the other hand, some 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.
Self-managed super funds (SMSFs)

SMSFs are substantially different to industry and retail super funds.

A self-managed super fund (SMSF) is a private super fund that you manage yourself. Accordingly, as an SMSF Member, you get access to benefits that don’t apply to members of other super fund types.

For instance, when you manage your own super, the money that you would normally put into a retail or industry super fund, instead, is put into into your own SMSF. You choose the investments and the insurance.

Your SMSF can have up to six members. Most SMSFs have two or more.

The above features and benefits of SMSFs are why this superannuation fund type is becoming increasingly popular and growing at such a rapid rate. As such, it comes as no surprise that this sector is fast-approaching one trillion dollars in value! That number looks like this: $1,000,000,000,000

As a member, you are a trustee of the fund — or you can get a corporate trustee. In either case, you are responsible for the fund.

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