{"id":7607,"date":"2022-08-22T12:02:05","date_gmt":"2022-08-22T02:32:05","guid":{"rendered":"https:\/\/adelaideprivatewealth.com.au\/get-to-know-your-super-fund\/"},"modified":"2022-08-22T12:02:05","modified_gmt":"2022-08-22T02:32:05","slug":"get-to-know-your-super-fund","status":"publish","type":"post","link":"https:\/\/adelaideprivatewealth.com.au\/get-to-know-your-super-fund\/","title":{"rendered":"Get to know your super fund"},"content":{"rendered":"
When you start a job, you can usually either choose a super fund or let your employer choose for you.<\/p>\n
Understanding the basics can help you work out what kind of account you get and whether it\u2019s right for you.<\/p>\n
If you want to choose your own \u2014 or change your account \u2014 there are lots of options.<\/p>\n
Most funds offer a simple, low-fee option, called a MySuper product. This is the default product your employer will use for you.<\/p>\n
There are two types of super funds: defined benefit funds and accumulation funds. Most super funds are accumulation funds.<\/p>\n
Accumulation funds<\/strong><\/p>\n In an accumulation fund, your money grows or \u2018accumulates\u2019 over time.<\/p>\n The value of your super depends on the money that you and your employers put in (known as super contributions), and on the investment return generated by the fund after fees and costs.<\/p>\n Defined benefit funds<\/strong><\/p>\n In a defined benefit fund, your retirement benefit is determined by a formula instead of being based on investment return.<\/p>\n Most defined benefit funds are corporate or public sector funds. Many are now closed to new members.<\/p>\n Typically, your benefit is calculated using:<\/p>\n the money put in by you and your employer<\/p>\n<\/li>\n your average salary over the last few years before you retire<\/p>\n<\/li>\n the number of years you worked for your employer<\/p>\n<\/li>\n<\/ul>\n Smart tip<\/em><\/p>\n If you\u2019re thinking about leaving a defined benefit fund, get professional advice. Some funds are very generous, so make sure you\u2019ll be better off. If you leave, you can\u2019t rejoin.<\/em><\/p>\n MySuper is a type of product you can have with a super fund.<\/p>\n It\u2019s the default product that your employer will pay your super into, unless you choose a different option.<\/p>\n MySuper products typically offer:<\/p>\n lower fees<\/p>\n<\/li>\n simple features \u2014 so you don\u2019t pay for services you don\u2019t need<\/p>\n<\/li>\n either a \u2018single diversified\u2019 or a \u2018lifecycle\u2019\u00a0investment option<\/a><\/p>\n<\/li>\n<\/ul>\n Even if you\u2019ve already chosen a super investment option within your existing fund, you can choose to move to a MySuper option.<\/p>\n Compare MySuper products<\/strong><\/p>\n You can find out about and compare MySuper products by using:<\/p>\n the funds product disclosure statement (PDS) for the MySuper product<\/p>\n<\/li>\n the ATO\u2019s\u00a0YourSuper comparison tool<\/a>\u00a0<\/p>\n<\/li>\n<\/ul>\n What to do if your MySuper product is underperforming<\/strong><\/p>\n If you have a MySuper product, your super fund must let you know if it has performed badly under an annual performance test done by the Australian Prudential Regulation Authority (APRA).<\/p>\n To help you make a decision about whether to switch funds and which product to switch to, you can use the ATO\u2019s\u00a0YourSuper comparison tool.<\/a><\/p>\n Most super funds fall into one of the following categories: retail, industry, public sector or corporate.<\/p>\n Retail super funds<\/strong><\/p>\n Retail funds are usually run by banks or investment companies. Anyone can join.<\/p>\n Main features:<\/p>\n They often have a wide range of investment options.<\/p>\n<\/li>\n They may be recommended by a financial adviser \u2013 contact us if you\u2019d like to find out more on [phone].<\/p>\n<\/li>\n Most range from medium to high cost, but many offer a low-cost or MySuper alternative.<\/p>\n<\/li>\n The company that owns the fund may keep some profit.<\/p>\n<\/li>\n<\/ul>\n Industry super funds<\/strong><\/p>\n Anyone can join the bigger industry funds. Smaller funds may only be open to people working in a certain industry, for example, health.<\/p>\n Main features:<\/p>\n Most industry funds are accumulation funds. A few older industry funds still have defined benefit members.<\/p>\n<\/li>\n They generally range from low to medium cost, and most offer MySuper products.<\/p>\n<\/li>\n They are profit-for-member funds, which means profits are put back into the fund.<\/p>\n<\/li>\n<\/ul>\n Public sector super funds<\/strong><\/p>\n Public sector funds are for government employees.<\/p>\n Main features:<\/p>\n They usually have a modest range of investment choices.<\/p>\n<\/li>\n Newer members are usually in an accumulation fund. Many long-term members have defined benefits.<\/p>\n<\/li>\n They generally have low fees and some offer MySuper products.<\/p>\n<\/li>\n Profits are put back into the fund.<\/p>\n<\/li>\n<\/ul>\n Corporate super funds<\/strong><\/p>\n A corporate fund is arranged by an employer for their employees.<\/p>\n Some large companies operate a corporate fund under a board of trustees who they appoint. Other corporate funds are operated by a retail or industry fund, but are only available to that company\u2019s employees.<\/p>\n Main features:<\/p>\n Those managed by a bigger fund may offer a wider range of investment options.<\/p>\n<\/li>\n Some older corporate funds have defined benefit members, but most others are accumulation funds.<\/p>\n<\/li>\n They are generally low to medium cost funds for large employers, but may be high cost for small employers.<\/p>\n<\/li>\n Corporate funds run by the employer or an industry fund will usually return all profits to members. Those run by retail funds will keep some profits.<\/p>\n<\/li>\n<\/ul>\n Self-managed super funds<\/strong><\/p>\n To weigh up the pros and cons of managing your own super fund, see\u00a0self-managed super funds<\/a>, or call us on [phone].<\/p>\n Source: Important note: This provides general information and hasn\u2019t taken your circumstances into account.\u00a0 It\u2019s important to consider your particular circumstances before deciding what\u2019s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete.\u00a0You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.\u00a0 Past performance is not a reliable guide to future returns.<\/span><\/p>\n Important<\/span> The post Get to know your super fund<\/a> appeared first on MLC Contemporary<\/a>.<\/p>\n<\/div>\n\n
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Reproduced with the permission of ASIC\u2019s MoneySmart Team. This article was originally published at\u00a0https:\/\/moneysmart.gov.au\/how-super-works\/types-of-super-funds<\/a><\/span><\/span><\/span><\/p>\n
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