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TMD

Showing superannuation funds based on investment performance of
and a super balance of
Past 5-year return
8.94

% p.a

FYTD return

3.01

% p.a

Company
Calc fees on 50k

$928

Features
Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
SuperRatings awards
SuperRatings Platinum 2021 MyChoice Super
Go to site

Horizon 4 - Balanced Portfolio

More details
Past 5-year return
8.49

% p.a

FYTD return

3.37

% p.a

Company
Calc fees on 50k

$445

Features
Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
SuperRatings awards
SuperRatings Gold 2021 MyChoice Super
Go to site

Growth Option

More details

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What is a retail super fund?

Retail superannuation funds are run by banks and other financial institutions. These superannuation funds, which are run by the likes of the Commonwealth Bank, ANZ, Westpac, Suncorp, ING and other Australian banks, are run to generate a profit for their shareholders.

There are a lot of investment options in a retail super fund with most funds offering hundreds of choices. The investments range from Australian shares, property, cash, international shares or could even be made up of a mixture of all these.

Originally retail super funds were developed by banks, investment institutions and insurance companies to cater for savvy people keen to save for their retirement.

Tip

Despite the name, retail super funds are not specifically for retail employees. Australians working in retail jobs can choose to put their super into an industry fund or a retail fund of their choice.

Who offers retail super funds?

There are many Australia-based banks, big investment firms and insurance companies who operate retail super funds. The big four banks (Commonwealth Bank, NAB, ANZ and Westpac) all have retail superannuation funds on offer.

Other Australian banks offering retail super funds include ING, Bendigo Bank, Suncorp and AMP. Some prominent financial companies offer retail super funds as well. Investment companies like Virgin Money, MLC and Perpetual have their own retail super funds as well.

Many of these superannuation providers also offer default MySuper products that you may be added to if you start a new job and don't select your own super fund.

Can anyone join a retail super fund?

Yes, retail super funds are open to anyone, but they are not always suitable for everyone. Always do your research before committing to a super fund.

Traditionally, retail funds were set up for white-collar workers who often worked for the institutions their superannuation was invested in, but today anyone is welcome to join retail super funds.

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What is the difference between retail and industry super funds?

Industry super funds are an alternative option to retail super funds. Industry funds are not run for profit and are run to benefit their members. Profits made by industry super funds may be reinvested into the fund, or used to provide additional services and benefits to the fund’s members.  

Many industry super funds were originally created to service workers in specific fields (e.g. nurses, teachers etc.). However, many of the bigger industry super funds have opened their memberships up to Australians from all walks of life.

Because industry super funds and retail super funds are structured differently, for different purposes, they may offer different performance and benefits to fund members. Remember that past performance is not a reliable indicator of future performance, so it’s essential to compare your options before making a choice between an industry or retail super fund.

How does a retail superannuation fund work?

Just like other superannuation funds, members of a retail superannuation fund will have their money invested into different shares, stocks and investments. This is done by professional investment managers.

The money in your retail super account comes from contributions made by your employer as well as any extras you put into it. This money is kept away and is accessed when you retire. 

Retail super funds are usually accumulation funds, which aim to grow funds that are held in the accounts over time. Due to the investments it is important to note that with an accumulation fund you run the risk that when you retire, your super payout may be lower if financial markets have recently fallen or continue to fall during your retirement.

You may be offered a choice of investment options, each offering a different level of risk versus potential reward. For example, you may be able to select a growth option that may be able to quickly increase your super balance through riskier investments, a conservative option that may be able to help safeguard your super balance by sticking to lower-risk investments, or a balanced option that offers a little of both. The best investment choice for you will depend on your personal financial situation.

You may also need to pay fees for your retail super fund. Administration fees may be used to cover the fund’s admin costs, and investment fees may help pay financial advisers to recommend investment options. It’s important to consider the cost of super fees when comparing super funds.

What are the benefits of retail super funds?
  • Anyone can join a retail superannuation fund
  • They usually offer a large number of investment options and choices
  • Wide range of costs for different funds means they are accessible for different levels of income and super contributions.
  • Retail super funds are usually accumulation funds
  • They can offer members a range of insurances on their superannuation funds
  • Retail super funds are run to generate corporate profits, which are passed on as dividends to the company’s shareholders, not as profits to super fund members.
  • Accumulation funds can be impacted by global financial market turbulence.

You should always consider your personal retirement and lifestyle choices before committing to any specific superannuation fund.

How much superannuation will you get with a retail super fund?

Your final superannuation payout will depend on a few things:

  • How much your employer contributed across your life.
  • How much you personally contributed into your personal super fund.
  • The investment returns in your super fund.
  • The amount of fees and charges you paid on your account.
  • The amount of tax you paid across your lifetime.

There are always variables to all of these depending on your choice of superannuation fund.

How do you access your super?

When you retire, you’ll need to assess a few things about your superannuation. You need to decide if you want your super as a regular pension, a big lump sum or a combination of both of these options.

You access your super after you’ve retired. Each super fund offers different levels of access to your superannuation so it is best to always understand the ins and outs of each fund depending on your own retirement goals.

There may also be grounds for accessing part of your super balance early under specific circumstances. This may include:

  • Compassionate grounds
  • Severe financial hardship
  • Terminal medical condition
  • Temporary or permanent incapacity
  • First Home Super Saver (FHSS) Scheme

How do you compare retail super funds?

One quick and simple way to compare retail super funds (as well as other options) is to use the tables on RateCity. Here, you can compare the investment performance, fees, features and other benefits of a range of superannuation options side by side.

Using the table filters, you can narrow down your selection of super options based on your preferred investment strategy, current super balance, and other features and benefits. You can also sort the results by their recent returns or level of fees, and view their badges from SuperRatings.

Once you’ve narrowed down your shortlist to just the super funds that may be best suited to your financial situation, you can learn more about the fund or get in touch with the provider with just a click.

Before you apply to join a retail super fund (or any other choice), remember to read the product disclosure statement (PDS), Financial Services Guide (FSG) and any other fine print. If you're not certain whether a super fund is the right choice for you, consider seeking professional financial advice. 

What other types of super funds are out there?

A retail superannuation fund is just the tip of the iceberg in terms of Australian super funds on offer. There are other types of funds, all with different pros and cons associated with them, each aimed at fitting different lifestyles and financial situations.

  • Self-managed super funds (SMSFs) put you in the driving seat of your own superannuation. A self-managed super fund makes you the manager of your super finances instead of a professional investor or fund manager, giving you more control over your superannuation investment decisions. Unlike other superannuation funds, a self-managed fund requires a lot of time and commitment, and there are risks involved in managing your own superannuation.
  • Industry superannuation funds are the main competition for retail superannuation funds. They are sometimes restricted to workers of a particular industry and tend to be run not-for-profit, meaning they give their profits back to their members.
  • Public sector superannuation funds are almost exclusive to employees of the federal and state government. They were created to cater to government employees working in many different government departments, who are often paid more than the normal contribution rate. Public sector super funds tend to have low fees and offer a medium range of investment options.
  • Corporate funds are super funds that are exclusive to the employees of a particular company. They are most often offered by large corporations.

What should you look for when choosing a fund?

The number one thing you need to consider when choosing a retail super fund, or any other fund out on the market, is your own personal goals, lifestyle and financial situation.

It is always important to consider all super funds on the market so you can get the best possible deal and the most possible growth in your superannuation fund.

We all want to be able to retire comfortably, so setting up the right Australian super fund for you is important.

There are some questions you should ask yourself when choosing your Australian superannuation fund:

  • What are my long-term and short-term life goals?
  • Do I own property?
  • How much will I need when I retire?
  • What do I want to do in my retirement?
  • At what age do I want to retire?

These are some but not all of the things you need to consider when looking for the right super fund.

Always chat to your employer about your options, because depending on your employment situation you may or may not be able to choose your own individual superannuation fund.

How do I switch superannuation funds?

Switching from one super fund to another may actually be easier than you expect, even if you’re switching from an industry fund to a retail fund or vice versa.

One simple option is to contact the super fund you want to switch to and see if they can walk you through the process of moving your super across. It may be as simple as filling out an application form, and they’ll handle the rest.

Alternatively, you can transfer your super using the government’s MyGov website.

You’ll also need to contact your employer and provide them with your new super fund information, to ensure that your super contributions are paid into the correct fund.

What is a superannuation fund?

A superannuation fund is an institution that is legally allowed to hold and invest your superannuation. There are more than 200 different superannuation funds in Australia. They come in five different types:

  • Retail funds
  • Industry funds
  • Public sector funds
  • Corporate funds
  • Self-managed super funds

Retail funds are usually run by banks or investment companies.

Industry funds were originally designed for workers from a particular industry, but are now open to anyone.

Public sector funds were originally designed for people working for federal or state government departments. Most are still reserved for government employees.

Corporate funds are arranged by employers for their employees.

Self-managed super funds are private superannuation funds that allow people to directly invest their money.

How many superannuation funds are there?

There are more than 200 different superannuation funds.

How do you set up superannuation?

Before you set up a superannuation account, you’ll need to check if you’re allowed to choose your own fund. Most Australians can, but this option doesn’t apply to some workers who are covered by industrial agreements or who are members of defined benefits funds.

Assuming you are able to choose your own fund, the next step should be research, because there are more than 200 different superannuation funds in Australia.

Once you’ve decided on your preferred superannuation fund, head to that provider’s website, where you should be able to fill in an online application or download the appropriate forms. You’ll need your tax file number (assuming you don’t want to be charged a higher tax rate), your contact details and your employer’s details (if you’re employed).

How do you open a superannuation account?

Opening a superannuation account is simple. When you start a job, your employer will give you what’s called a ‘superannuation standard choice form’. Here’s what you need to complete the form:

  • The name of your preferred superannuation fund
  • The fund’s address
  • The fund’s Australian business number (ABN)
  • The fund’s superannuation product identification number (SPIN)
  • The fund’s phone number
  • A letter from the fund trustee confirming that the fund is a complying fund; or written evidence from the fund stating it will accept contributions from your new employer; or details about how your employer can make contributions to the fund

You might want to provide your tax file number as well – while it’s not a legal obligation, it will ensure your contributions will be taxed at the (lower) superannuation rate.

How do you create a superannuation account?

Before you create a superannuation account, you’ll need to check if you’re allowed to choose your own fund. Most Australians can, but this option doesn’t apply to some workers who are covered by industrial agreements or who are members of defined benefits funds.

Assuming you are able to choose your own fund, the next step should be research, because there are more than 200 different superannuation funds in Australia.

Once you’ve decided on your preferred superannuation fund, head to that provider’s website, where you should be able to fill in an online application or download the appropriate forms. You’ll need your tax file number (assuming you don’t want to be charged a higher tax rate), your contact details and your employer’s details (if you’re employed).

This article was reviewed by Personal Finance Editor Alex Ritchie before it was published as part of RateCity's Fact Check process.