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.

There are a few things you need to know when choosing a super fund. Do your research and ask around before you commit yourself.

Check if you can choose your fund

Smart tip

Defined benefit funds are usually very advantageous so think very carefully and seek advice before you move out of one.

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.

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 employer's fund.

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.

Things to compare

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
Fees The lower the better
Investment options Make sure there are options that suit your needs and comfort with risk
Extra benefits Your employer may pay more than 9.25% for certain super funds or if you make extra contributions yourself
Performance Pick a fund that has performed well over the last 5 years - do not chase last year's best performer
Insurance See what cover is available and what it will cost
Service Call the fund or browse their website to see what other services they offer

Use the superannuation calculator to compare super funds.

Superannuation calculator

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.

Super comparison websites

Super comparison websites like these, publish ratings on super funds:

For more information see super comparison websites.

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. From 1 January 2014, if you haven't chosen 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 account. Use the super fund comparison worksheet.

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 types of super funds.

Changing super funds

To change super funds you need to fill out a transfer form. You can get this form from your super fund, or go to the ATO's information on transferring your super.

You need to provide proof of identity to transfer to another fund; this protects your super from being unlawfully transferred by someone else.

You would 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 funds with similar asset allocations
  • Leave a corporate fund after resigning from your job (a corporate fund generally only accepts contributions from the employer)

Don't rush to change super funds if:

  • You're worried about a negative return - stick to judging performance over 5 years or more
  • You're chasing last year's top performing fund as it may not perform as well in coming years

Before you change super funds or if you get automatically transferred to the 'personal' division of a super fund when you change jobs, check:

  • If changing funds will affect how much your employer contributes
  • The impact on your retirement benefit if you're in a defined benefit fund (if you get your employer to put contributions in a new fund, your existing super will still sit in your old fund unless you transfer it)
  • That you're not losing insurance benefits
  • The exit/termination fees of your old fund
  • The contribution fees for your new fund

Read more on automatic rollover of your super.

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'.


Related links

Last updated: 30 Oct 2013

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