Where does my super go?

There are several types of superannuation funds in Australia.

Industry Funds are multi-employer funds run by employer associations and other industry groups. As there are no shareholders, industry funds are run only to benefit members with any profits going back into the fund. Some Industry funds are open only to those employed within a certain industry or set of industries but most are public offer –anyone can join, regardless of their type of work.

Retail funds are run by financial institutions such as banks, investment and insurance companies. Anyone can join a retail fund, but unlike industry funds the company that owns the fund aims to retain some profit.

Corporate Funds are established by employers specifically for their employees. The fund may be operated by the employer under a board of trustees or run under an ‘employer sponsored’ arrangement with an industry or retail fund. Membership is usually restricted to current and former employees but may include their spouses.

Public Sector Funds were created for employees of Federal and State government departments. Most are only open to government employees.

Self-Managed Superannuation Funds (SMSFs) are funds established for a small number of individuals (5 or less) and regulated by the Australian Tax Office. The fund’s members are usually its trustees who are responsible for managing the fund’s investments.

Where your super goes will often depend on the kind of work you do and how your employer has set up their superannuation arrangements. You may be eligible to choose your own fund. Before making a decision to close an existing super fund you should consider any penalties such as exit fees, changes to insurance cover or loss of benefits that may apply.

Who chooses where my super goes?

Some awards and workplace agreements may include a specific superannuation arrangement but most employees can choose which fund their employer pays their contributions into.

If you can nominate your own choice of fund but do not provide your employer with details of your choice, your employer will generally create an account for you with their default superannuation fund.

It’s worth keeping your number of accounts to a minimum as many include insurance arrangements with varying premiums and most will have account-keeping fees. If you do choose to open an account with your employer’s default fund, you may be able to combine your old accounts into the new fund.