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Choosing a super fund

Most people can choose the fund that receives their super payments.

High-pressure sales tactics are putting your super savings at risk. Be on red alert for phone calls, click bait advertising and promises of unrealistic returns to encourage you to put your super into risky investments. Stop, think carefully, and check the claims first.

Read the investor alert and our tips on how to protect your money.

How to choose a super fund

There are different types of super funds to choose from.

To choose the best fund for you, it helps to weigh up 5 key features:

  1. Investment options
  2. Investment performance
  3. Fees
  4. Insurance
  5. Services

1. Investment options

Most super funds offer a range of investment options for you to choose from.

These can include options that invest in one specific asset type (like shares or property). It can also include options that invest in a mix of diversified investment options, such as:

Some funds also offer more choice, letting you set how much you invest in different types of assets, or pick specific options from the fund's list of direct investments. Some funds give you, or your financial adviser, access to hundreds of options via a platform.

These options give you more say in how you invest your money, but this means you have more responsibility to make decisions to suit your needs.

If you haven't made an investment choice, your super fund puts your money into its MySuper product. MySuper is simple, low-cost, and made to suit most people. You can leave your money in the MySuper investment option as long as you want.

The Australian Taxation Office (ATO) has an online YourSuper comparison tool to compare MySuper products.

2. Investment performance

Take a look at how the fund has performed over the past 5 years or longer. Also think about how fees and other costs could shape returns over time.

Try to compare similar investment options. For example, look at one balanced investment option of one fund alongside the balanced investment option of another fund, and use the same timeframe so you get a fair picture.

Keep in mind that past performance is not a guarantee for future performance.

3. Fees

Every super fund charges fees for their services. These can be a dollar amount, a percentage, or a mix of both. For the same level of investment performance, lower fees usually help your balance grow faster. Funds take fees out on a regular basis, such as each week or month. They may also charge you when you make changes like switching investments. Keep an eye out for these fee names:

4. Insurance

Super funds usually offer 3 types of insurance for members:

Some super funds might provide you with automatic or 'default' insurance when you join. When you compare the insurance they offer, look for:

You can read more in insurance through super.

5. Services

Some funds offer extra services that may cost more, like financial advice.

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Compare super funds

You can also find out about and compare super funds by using:

Comparison websites

Comparison websites can be useful, but they are businesses and may make money from promoted links. They may not show every option. They also use their own assessment criteria and score things differently, so rating can vary between sites.

Read what to keep in mind when using comparison websites.

Super comparison websites include:

These sites offer some free information. Some also offer more detailed information for a fee. Don't choose a super fund based only on its rating on one of these websites.

Instead, compare these features:

What to compare

Why it matters

Investment options

Check the investment options your super fund offers to ensure there's something that matches your risk tolerance and time to retirement.

Performance

You returns will depend on the performance of your investment options. Look at 5-year returns, or longer, for the same investment option across different super funds, to compare performance. 

Fees

Fees reduce your account balance over time. Look at the administration, investment and any other fees and how often they are charged.

Insurance

Insurance is a way to protect what you have if something goes wrong, but at a cost. Check what insurance cover you get automatically, the premiums (cost), and any exclusions or waiting periods that may apply. Also check what other insurance you can choose to apply for.

Services

Compare online tools, advice, customer service options, and how easy it is to make changes.

Once you have the information you need, use our super calculator to compare how different funds will work for you.

Work out how much super you'll have when you retire.

What to do if your super fund is underperforming

Your super fund must let you know if it underperforms under the Australian Prudential Regulation Authority's (APRA) annual performance test.

If this happens, take a moment to consider your options. You can compare the features listed above to help you decide whether to switch funds and to know which product might suit you better. If you have a MySuper product, you can also check the ATO's YourSuper comparison tool to see how it stacks up.

If you don't choose a super fund

If you don't choose a super fund, your employer checks with the ATO to see if you already have one. This is your stapled super fund.

If you don't have a fund yet (for example, in your first job) your employer pays your super into a 'default' super product they chose. 

Savannah chooses lower super fees

Savannah is 30 and earns $50,000 per year as a librarian. She has $20,000 in super and was paying 2.5% fees.

She compared funds and switched to one that charges only 1% fees for the same level of performance.

By choosing a fund with lower fees, Savannah will have $81,000 more in her super at age 65. Her balance will be $336,000 instead of $255,000.