How to Choose a Super Fund

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Industry Funds vs Retail Funds

The biggest decision when choosing a super fund is whether to go with an industry fund or a retail fund.

Industry Funds

• Not-for-profit, run only for members
• Generally lower fees (administration + investment fees typically 0.8% — 1.2% p.a.)
• Strong long-term performance track record
• Examples: AustralianSuper, Hostplus, REST, UniSuper, Aware Super, HESTA, CBUS

Retail Funds

• For-profit, owned by banks or financial institutions
• Higher fees (often 1.5% — 2.5% p.a.) but offer more investment choice
• May offer superior digital platforms and advice services
• Examples: Colonial First State, MLC, AMP, BT Super, OnePath

What to Compare When Choosing

1. Fees

Fees are the single most important factor within your control. Even a 0.5% difference in fees can cost you over $100,000 across a working lifetime. Look at:

• Administration fees: flat dollar fee or percentage-based
• Investment fees: costs of managing your chosen investment option
• Indirect cost ratio (ICR): additional investment-related costs
• Performance fees: charged if the fund exceeds a benchmark
• Insurance premiums: for default life, TPD, and income protection cover

2. Investment Options and Performance

• MySuper (default) option: simple, low-cost, usually a balanced or lifecycle strategy
• Choice options: from conservative to high-growth, plus indexed and ethical options
• Pre-mixed options: ready-made diversified portfolios
• Direct investment options: some funds let you invest directly in ASX shares, ETFs, or term deposits
• Compare long-term returns (7+ years) rather than short-term performance

3. Insurance

Most super funds offer default insurance cover:

• Life insurance (death cover)
• Total and Permanent Disablement (TPD): covers you if you can never work again
• Income protection: replaces up to 70% of your salary if you're temporarily unable to work

4. Member Services and Features

• Online portal and mobile app quality
• Financial advice services (some funds offer free or low-cost advice)
• Member education and retirement planning tools
• Member satisfaction ratings

Steps to Choose or Switch

1. Compare your current fund against 2 — 3 alternatives
2. Check if your employer has a default fund (you can usually still choose)
3. Read the Product Disclosure Statement (PDS)
4. Consider whether you need insurance and whether it transfers
5. Use the ATO's online comparison tool YourSuper
6. Complete the new fund's membership application
7. Notify your employer of your chosen fund

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How Fees Eat Into Your Balance

Super funds charge three main types of fees: administration fees (a flat amount per year), investment fees (a percentage of your balance), and indirect costs. A 1% difference in total fees sounds small, but over a 40-year working life it can consume hundreds of thousands of dollars of your final balance. That is because the fee is charged on your whole balance every year — so the larger your balance grows, the more the fee costs, and the less there is to compound.

Concrete example: starting with $0 and contributing $12,000 a year at 7% gross return, a fund charging 0.5% in total fees leaves you with roughly $2.6 million after 40 years, while a fund charging 1.5% leaves you with around $2.1 million — a difference of about half a million dollars. This is why the government requires funds to publish fees in dollars for a $50,000 balance and why the YourSuper comparison tool highlights underperforming MySuper products.

Action Plan: Switching Funds in 2026

1. Compare your current fund against at least two alternatives using the ATO's YourSuper tool and the funds' own PDS documents.
2. Check the insurance you hold before switching — a new fund's default cover may be lower, and you may not be able to replace it without medical underwriting.
3. Check for exit or switching fees, and whether your current fund charges a percentage-based advice fee.
4. Complete the rollover online through myGov — most rollovers between funds complete within a few business days.
5. Keep your TFN and bank details updated in the new fund so contributions and the government co-contribution flow correctly.

A Simple Rule of Thumb

If you are unsure where to start, follow the default path that works for most people: pick a large, well-established industry fund with low fees, choose a diversified (balanced or growth) MySuper option, and set it and forget it while you review it once a year. Compare the total fee in dollars at your current balance, not just the percentage, and check the fund's 10-year returns against the median for its category. Avoid switching funds repeatedly — each rollover takes time, and constantly chasing last year's best performer usually costs more in fees and disruption than it gains.

Whatever fund you choose, make sure your TFN is on file (otherwise contributions are taxed at the top marginal rate of 47% instead of 15%), and review your insurance and investment mix after major life events like a new job, marriage, or buying a home.