Smarter Super - Invest in your future and make the most of your retirement
ABA logo
IFSA logo
FPA logo

Important Notice

This booklet gives information of a general nature and is not intended to be relied on by readers as advice in any particular matter.

You should consider consulting a financial adviser regarding how this information may apply to your own circumstances.

Other formats


Different coloured apples (red and green) lined up in a row


Broadly speaking, superannuation is structured in one of two styles – defined benefit or accumulation.

  • Defined benefit: The benefit to be paid to the member is defined in advance of the member’s retirement and is usually calculated based on a formula which takes into account the person's years of employment and salary at retirement. It may be expressed as a proportion – perhaps two thirds or 75% – of the member’s salary on retirement, redundancy or resignation. It is generally the employer that carries the investment risk, not the member.
  • Accumulation: Members in accumulation arrangements – also known as defined contribution – are entitled to the total of employer and other contributions put into their super accounts, adjusted for investment earnings (positive or negative), less any taxes, fees, charges or other expenses. Members bear the investment risk.

Both styles have a unique set of characteristics that influences the way contributions are made and how any investment gains the fund makes are treated.

Most superannuation funds in Australia are accumulation style. As the accumulation structure has risen in popularity over the past decade or so, the number of defined benefit arrangements has tapered off. Some super funds provide a hybrid of accumulation and defined benefit arrangements.


There are five main types of super funds in Australia:

  • Public offer funds (also known as ‘retail funds’) – are open to the public and run by financial institutions. They allow a large volume of people and/or companies to operate their super arrangements as a single group.
  • Employer or corporate funds – are open to people working for a particular employer or company and are usually tailored to meet the requirements of the particular company and its employees.
  • Public sector funds – are provided by Government for public sector employees.
  • Industry funds – are open to people working in a particular industry or under a particular industrial award, although some industry funds are 'public offer' and allow anyone to join.
  • Self-Managed Superannuation Funds (SMSFs) – also known as Do It Yourself or DIY funds, these cater for individuals who want to create and operate their own super fund, although they must do so according to strict legal and regulatory requirements. SMSFs have fewer than five members, all of whom must be trustees or alternatively, directors of a corporate trustee. SMSFs are generally unsuitable for people with relatively modest amounts of money to invest or those who don’t want to assume responsibility for the trustee role.

Did you know?

A Retirement Savings Account (RSA) is an alternative to a super fund. It is a type of account offered by banks, building societies, credit unions, life insurance companies and prescribed financial institutions. RSAs guarantee that you’ll get back at least what you put in so they tend to invest in conservative investments with returns similar to that of a bank account or term deposit. While they may be suitable for a short time, RSAs may not be appropriate over the longer term. You should speak to a financial adviser to determine whether these products suit your needs.


Before choosing a fund, consider your personal circumstances and take some time to understand the rules of the super fund, what benefits are offered and how your super might be affected if you change jobs or working hours. Moving from your current fund to a new fund may not best suit your needs.


Consider comparing two or more funds side by side by drawing up a table and writing the relevant attributes in columns beside each other so you can make a direct comparison.

The 'Super Checklist' can assist you to identify the attributes that are the most important to you.



Since July 2005, millions of Australians have been able to choose which fund they would like to direct their compulsory employer superannuation contributions.

Under the Government’s ‘Choice of Fund’ rules you’re eligible to choose your super fund unless:

  • your super is paid under certain State awards or industrial agreements,
  • your super is paid under a Federal workplace agreement (e.g. a collective agreement or Australian Workplace Agreement),
  • you’re a Federal or State public sector employee excluded from choice by law or special regulations,
  • you’re in a particular type of ‘defined benefit’ fund or you’ve already reached a certain level of benefit in that fund.

Speak to your employer or visit if you are unsure whether you are entitled to ‘choice of fund’.

Employers with employees entitled to choose their fund must give their employees a choice of fund form when they commence employment, and also allow them to make a choice once every year. To choose a fund you will need to complete the choice form and provide all required details in writing. The fund must comply with the Government's rules on supernannuation and your employer must be able to make contributions to that fund.

If you don’t want to choose a fund, your employer will contribute your super money into a fund which they choose. This fund may not necessarily be the most appropriate fund for you.

If you do make a choice or are wondering whether you should change your fund, there are several issues worth thinking about. Even though everyone’s requirements for a super fund are slightly different, the “Super Checklist” can help you put things into perspective.


Did you know?

The Super Fund Lookup service contains publicly available information about super funds that have an Australian Business Number (ABN). Super Fund Lookup provides:

  • Real time data on the status of a super fund and its contact details
  • Information on the taxation implications of making investments with a super fund
  • Access to further information about super funds.

Super Fund Lookup includes funds regulated by the Australian Taxation Office and Australian Prudential Regulation Authority. It is available at


  1. Types of Funds:

    Each type of super fund can tend to have its own traits which some might perceive as strengths and others as weaknesses. For example, a SMSF to one person might offer autonomy and greater investment flexibility, but to another person, the responsibilities and risks of running a fund might be far too onerous. A retail fund might seem to one person to have too many investment options, while another person sees the fund as particularly attractive because it might provide unique services and flexibility.

  2. Product features:

    Compare the sorts of product features provided by the fund and decide which features are important to you. For example, you might want a fund where you can open an account for your spouse and make spouse contributions or you might want a fund that offers attractive retirement income stream options through pension products.

  3. Investment options:

    Compare the investment options available in the fund. What sort of investment option suits your ‘risk profile’? How much flexibility do you want to change your investment choice, tailor your options or blend options? For example, you may want to be quite selective with your investments and have more of your super in a certain asset class, such as Australian shares. This is important if you have other investments as it will help you ‘diversify’ your investments. Some funds give a lot more choice than others.

  4. Contributions:

    Check whether your employer will contribute more to one particular fund or offer higher benefits in one fund. Check whether you can take advantage of the Government’s Super Co-contribution initiative.

  5. Insurance:

    Compare the insurance cover offered by the fund. Does the fund provide ‘automatic acceptance’ insurance cover up to a certain level? What does it cover you for and at what cost? If you change funds or no longer have an employer contributing on your behalf, what does this mean for your insurance cover? You wouldn't want to find yourself without cover.

  6. Fees and Costs:

    There will be a variety of potential fees and charges in each fund. Consider things like the annual administration fee, investment management fees and other fees, such as expense and service fees, which may be payable by you if you want to change investment options, transfer to another fund or roll-over to another super fund and terminate your membership with your current fund. Super funds must show all significant fees in a table in the fund’s Product Disclosure Statement (PDS).

  7. Investment performance:

    Since superannuation is a long-term investment, you should examine investment performance over at least a five year time frame. Look at what sort of track record the fund has, although keep in mind that past performance is no guarantee of future performance.

  8. Awards or ratings:

    There are a number of industry associations, research houses and ratings agencies which evaluate super fund activities or rate funds on particular criteria. You might find it worthwhile to hear what others are saying about your potential fund – but you should make sure that any fund rating is comparing ‘like with like’.

  9. Complying and licensed:

    Confirm the superannuation provider is adequately licensed and complies with super rules and regulations. If the fund is complying, your money will benefit from tax concessions. Individual funds must be able to provide evidence of whether they are complying. For more information about the super fund, check the Super Fund Lookup service at

  10. Extra benefits:

    Some funds offer more flexible or extensive member services than others. For example, some funds might offer discounted or free access to financial planning services. Other funds might provide access to other benefits, such as discounted health insurance or home loans. Some funds might offer more extensive Internet-based access and tools. Look at the sorts of services on offer and consider what is attractive or important to you. Would you get value out of a few 'bells and whistles' or would you be happier with a more basic offering?

Back Next
back to top

Important note | Contact Us | Feedback | Order a free booklet | ABA Home
Copyright, Australian Bankers' Association. All rights reserved - Web Design and Development by Elcom Technology