Choosing a super fund
Picking your perfect match
Choosing a super fund is a bit like dating. Pick the right fund
and you'll be set for a long, happy and comfortable life when you
retire. Set your sights on the wrong one and you're in for a world
of pain. Here's how to choose the best super fund for you.
Check if you can choose your
Most people can choose the fund for their employer's super
contributions. However, some people who are covered by industrial
agreements and members of defined benefit
funds don't have this choice.
Defined benefit funds are usually very advantageous so think
carefully and seek advice before you move out of one.
To find out if you can choose a fund, check with your employer
or see the Australian Taxation Office's (ATO's) information on choosing a super fund.
If you do have a choice, your employer will give you a 'standard
choice form' when you start work. The form sets out your options
for choosing a super fund. You can select your own or go with your
Provide your tax file number when you join a super
fund. This ensures you're taxed at the special low rate and your
super account is less likely to get lost.
How to compare super
There are a few key things to consider when comparing super
funds. Spend some time looking at your choices.
|Things to compare
||What to look out for
||The lower the better
||Make sure there are options that suit
your needs and comfort with risk
||Your employer may pay more than 9.5%
for certain super funds or if you make extra contributions
||Pick a fund that has performed well
over the last 5 years - do not chase last year's best
||See what cover is available and what
it will cost
||Call the fund or browse their website
to see what other services they offer
Where to find information on different super funds
You should be able to find information on fees, investment
options, benefits and performance in the following places:
Make sure you are comparing apples with apples by paying
attention to factors like how often the quoted fees will
be charged on your account and the
period the investment returns relate to.
For example, a 5-year average return for the period ending 30
June may be different from a 5-year average return for the period
ending 30 September.
When looking at investment returns, also make sure
your comparison is based on the investment option you want to
invest in. There's no point comparing balanced investment options
if you will actually choose a conservative or growth option.
You may find super comparison websites
helpful in gathering some of this information.
Once you have information on different funds, plug them into our
calculator to compare them.
What happens when you don't choose
If you don't choose a super fund when you start a new job, your
employer will pay contributions for you into a 'default' fund
that they choose or as identified in an industrial award. If
you don't chose a super fund, your employer must pay your super
into a MySuper account. MySuper accounts have lower fees and simple
features so you don't pay for services you don't need. My Super
accounts are available now. See MySuper.
Compare the default fund with at least two other funds, such as
an industry fund and a retail fund including a MySuper
You can choose a fund at any time, but you cannot make your
employer change your fund more than once a year.
If you have several super fund accounts, you can transfer the
money to your new fund. It saves time and money in the long run to
keep your super in as few accounts as possible. However, check if
you will lose important insurance benefits by leaving a fund. See
of super funds.
Video: Andrew talks about changing super funds
Changing Superannuation fund video
Andrew from the MoneySmart Team gives MoneySmart reader Sally
some tips about what to look out for when changing super funds.
How to change super
You might want to change super funds to:
- consolidate your super into one account
- reduce fees
- invest in a fund with better services and features
- get out of a fund that has performed poorly over a 5-year
period compared to similar funds
- leave a corporate fund after resigning from your job (a
corporate fund generally only accepts contributions from the
You can change super funds by filling out a rollover form and sending it to your new fund
or by logging on to your MyGov account. Visit the ATO's keeping track of super webpage for more
If using the rollover form you need to provide proof of identity
to transfer to another fund; this protects your super from being
unlawfully transferred by someone else.
Don't rush to change super funds if:
- your fund performed badly in a single year - stick to
judging performance over 5 years or more
- you're chasing last year's top performing fund - it may
not perform as well in coming years.
Check your life insurance cover before moving funds
If you change super funds you may not get the same death, total
permanent and disability or income protection cover that you had in
your old fund. Be particularly careful if you have a pre-existing
medical condition or are aged 60 or over. Seek financial
advice if you are unsure.
Before you change super funds
If you're thinking about transferring your super,
- if changing funds will affect how much your employer
- the impact on your retirement benefit if you're in a defined
- that you've notified your employer to make
future contributions to your new fund
- that you're not losing insurance benefits you want to keep
- the exit fees of your old fund
- whether your new fund charges contribution fees.
If you have been transferred automatically from your current
super fund, read automatic rollover of your
You hope to be with your super fund for a long
time. Like dating, ask lots of questions and check out all the
things that could change or go wrong before you say 'I do'.
Last updated: 31 May 2018