Retail super funds
This type of fund is open to the public and is offered by a fund manager. The fund manager must provide a product disclosure statement, which sets out investment choices and fees.
Retirement savings accounts
This type of account is offered by most financial institutions and generally invests in low-risk assets, such as cash and fixed interest. Retirement savings accounts are a low-maintenance account and can be used by employers to meet employee superannuation commitments. They also may be used by individuals for depositing their personal superannuation contributions.
Industry funds
Industry funds usually are made available to people who work in a specific industry, though some funds allow anyone to join. Industry funds typically have lower fees but also may have limited investment options.
Defined benefit funds
This type of fund is used by employers for employees, but they are becoming less common because they are more expensive to run. In most cases, a defined benefit is a pension, a lump sum or a combination of both. Defined-benefit super funds usually have higher benefits accumulated than that of a normal accumulation super fund, so members often choose to remain and rarely rollover into other types of funds.
Public sector funds
This type of fund is similar to an employer fund except that members are government employees or work for a government-owned enterprise or authority. Public sector funds generally have low fees and members often receive higher superannuation guarantee contributions than the standard 9%.
Superannuation guarantee
Was introduced by the Australian Government to help Australians provide for their retirement. Many people don’t realise that the minimum 9% employer contribution to superannuation is unlikely to be enough to support a comfortable retirement.
Super choice
Enables eligible employees to choose the superannuation fund that their employer contributions are paid into. Super choice helps you to have better control of your superannuation.
These funds must have fewer than five members and are usually managed by self-employed people or those who want to manage their own super. The main advantage of a do-it-yourself fund is that you have greater control over how your funds are invested. Legal and accounting fees mean it is generally more expensive to manage a do-it-yourself fund, so as a general rule your fund balance should be $200,000 before you consider this option.
If you are interested in starting a self managed superannuation fund, more information is available for you to download.
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