Types of super funds
Are you my type?
There are many types of super fund, each is a bit different.
Knowing the different types of fund will make it easier for you to
choose a fund. Super funds can be grouped into a number of
Many super funds offer a new type of account called MySuper.
MySuper has replaced most existing default accounts offered by
super funds. If you don't choose a super fund yourself your
employer must pay your employer contributions into a MySuper
MySuper accounts offer:
- lower fees (and restrictions on the type of fees you can be
- simple features so you don't pay for services you don't
- a single diversified investment option or a lifecycle
MySuper is only offered for accumulation
funds, not for defined benefit
funds and does not apply to accounts in pension phase. Retail,
industry and corporate funds can all offer MySuper accounts.
MySuper investment options
There are two ways super funds can manage your investments
through MySuper accounts. They will either use a single diversified
investment strategy or a lifecycle investment approach.
Single diversified investment strategy
This is how most MySuper options work. If you do nothing, your
money will be put in a standard mix of investments and the
risk-reward approach will stay the same for your whole life.
Check with your super fund to find out about their investment
approach. It is common for these funds to have a balanced/growth
approach to investing with 70% of assets in growth (e.g. shares and
property) and 30% in defensive investments (e.g. cash and fixed
Lifecycle investment approach
Super funds that offer a lifecycle option will move your money
from growth investments when you're young to more conservative
investments when you're older. The goal is to take on more risk
when you're young because you have time to ride the ups and downs
of financial markets. Then, as you get older, your super
fund will reduce your risk to secure what you've built up over your
You don't have to make any changes yourself with a lifecycle
option - your fund automatically changes your investment strategy
This table shows you an example of a typical investment mix with
a percentage of your super savings in growth and defensive
assets, depending on your age.
Typical mix for a lifecycle investment
|65 or older
Find out more about super investment options.
Getting a MySuper account
If you haven't chosen your super fund in the past and you have
just gone with the fund your employer selected, your super will
have been automatically transferred into a MySuper account.
If you are in a defined benefit
fund, or you have invested in certain legacy products, you will
not be transferred to a MySuper account. Ask your super fund if you
are not sure where you stand or you want more information. If you
have already chosen a super investment option within your existing
fund you can choose to move to a MySuper option if you want.
To find fund options, search the MySuper funds list.
MySuper funds list
Contact your super fund to see if MySuper is right for you. See
a super fund to find out more about your options.
Retail funds are usually run by banks or investment
companies. Anyone can join these funds.
The main features are:
- They often have a large number of investment options,
sometimes in the hundreds.
- They are usually accumulation
- They are usually recommended by financial
advisers who may be paid for their advice by fees and/or a commission (commissions are being
- Most retail funds range from mid to high cost, but some offer a
low cost or MySuper alternative.
- The company that owns the fund aims to retain some profit.
The larger industry super funds are open for anyone to join.
Some others are restricted to employees in a particular
The main features are:
- They usually have a smaller number of investment
options, which will meet most people's needs.
- Most funds are accumulation
funds, a few older funds still have defined
- They are generally low to mid cost funds and some offer MySuper
- They are 'not for profit' funds which means profits are put
back into the fund for the benefit of all members.
Public sector funds were created for employees of federal and
state government departments. Most are only open to government
The main features are:
- Some employers contribute more than the 9.5% minimum.
- They have a modest range of investment choices that will meet
most people's needs.
- Many long-term members have defined
benefits, newer members are usually in an accumulation fund.
- They generally have very low fees and some offer MySuper
- Profits are put back into the fund for the benefit of all
A corporate fund is arranged by an employer, for its
Some larger corporate funds have an employer who also
operates the fund under a board of trustees
appointed by the employer and employees. Other corporate
funds may be included as a separate part of a large
retail or industry super fund (especially for small- and
The main features are:
- Those managed by a larger fund may offer a wider
range of investment options.
- Some older corporate funds have defined
benefit members, most others are accumulation
- They are generally low to mid cost funds for large employers
but may be high cost for small employers.
- Funds run by the employer or industry fund will usually return
all profits to members, while those run by retain funds will retain
An eligible rollover fund (ERF) is a holding account
for lost members or inactive members with low account
balances. These funds cannot receive employer
Just like ordinary super funds, some ERFs have low
investment returns and may charge high fees, while others have good
returns and low fees.
Some ERF providers will try to find your active super fund
as your money is likely to grow faster if you consolidate your
ERF with your active super fund.
These funds are discussed in detail on the self-managed super fund
The difference between
accumulation and defined benefit funds
Most Australians have their super in an accumulation fund. They
are called 'accumulation' funds because your money grows or
'accumulates' over time.
The value of your super depends on the investment option you
choose, as well as how much money:
- your employer contributes
- you deposit in extra contributions
- you receive in bonus contributions
- the fund earns from investing your super
- you are charged in fees.
Investment profits are added to your account, and investment
losses are taken out.
In an accumulation fund you bear the risk that
your super payout will be lower if financial markets drop.
Defined benefit funds
Never leave a defined benefit fund unless you're very sure you
will be better off. Some of these funds are very generous.
Defined benefit funds are less common than accumulation funds.
Most defined benefit funds are corporate or public sector funds,
and many are now closed to new members.
The value of your retirement benefit is defined by the fund
rules and depends on:
- how much money your employer contributes
- how much extra you contribute
- how long you have worked for your employer
- your salary when you retire.
For example, after 25 years' membership, your retirement benefit
might be worth:
- five times your final salary, as a lump sum, or
- 75% of your final salary, as a monthly payment until you
Get professional advice if you're considering changing from a
defined benefit fund to an accumulation fund. Once you leave, you
can't get back in. Often defined benefit funds are the better
In a defined benefit fund your employer or the
fund generally takes on the investment risk. But be aware that
defined benefit funds can be affected by market downturns, and some
employers or funds may have difficulty taking on the market
If you're thinking about changing funds, start
by working out where you stand now. Different types of funds have
different features and drawbacks. Knowing the type of super fund
you're in will help you make informed decisions about your super
Last updated: 12 Feb 2019