Note: We regularly update this article with the latest data on superannuation funds issued by the Australian Prudential Regulation Authority. This article contains the latest data available, released on 27 February 2018 (for data as at 31 December 2017).
Unless you work in the superannuation industry, how the world of super works can be bamboozling (sometimes it can be confusing even when you know the industry well). This article, on the different types of super funds, helps explains the main players in the Australian super world.
This article should really be titled ‘The what’s what in the super zoo’ because we’re explaining the different types of super funds available, rather than the people involved.
You may find this difficult to believe but there are only 5 types of super funds in Australia, and most Australians can only choose from 3 of these super fund types. You can expect to find the following five broad types of super funds:
- Company (or corporate) funds
- Industry funds
- Retail funds (although you may be offered a series of funds via a ‘wrap’ or a ‘platform’)
- Public sector funds (also known as public sector schemes)
- Small funds, which have fewer than 4 members in each fund (two types of small funds: self-managed super funds, and small APRA funds. APRA stands for the Australian Prudential Regulation Authority, the main super regulator)
I explain the difference between these types of super funds later in this article.
How many super funds are in Australia?
Let’s deal with the big numbers first. Based on statistics released in February 2018, there were roughly 595,000 super funds in Australia (594,944 on December 2017 figures), excluding pooled superannuation trusts (41), single-member ADFs (12) and exempt schemes (19).
Of these 594,944 super funds, a massive 594,737 of these super funds were small funds (super funds with fewer than 5 members). Nearly all small funds are self-managed super funds (SMSFs) (592,658) and a fraction of small funds are small APRA funds (2,079).
What all of these numbers mean is, if you are considering one of the remaining four categories of super fund – corporate, industry, retail, public sector – then you have only 207 super funds to consider. Okay, that is still a lot of super funds, but if we break it down into the individual categories (see text and table below), the super world looks a little less daunting.
Briefly, the following are the four types of managed superannuation fund:
- Industry fund. An industry fund usually caters for workers from a particular industry but many of them are now available to anyone. As at December 2017, there are 40 industry funds.
- Company/corporate fund. A company or corporate fund is generally a super fund with membership only open to employees working for that company. You can’t choose a company fund but you may choose to remain in a company fund, if you’re an employee of the company and an existing fund member. Some company funds permit relatives of existing members to join too. As at December 2017, there are 24 corporate super funds.
- Public sector fund. A public sector fund is only available to public sector (government) employees and, in some cases, ex-public sector employees. You can’t choose a public sector fund although some of them let you choose to remain a contributing member when you leave the public sector – in these circumstances you may be able to arrange for your new employer to contribute to your public sector fund. As at December 2017, there are 18 public sector funds.
- Retail fund or master trust. Financial institutions such as banks, financial planning groups and fund managers run retail super funds. Anyone can join these types of funds. You may be a member of a retail fund if your employer pays your Superannuation Guarantee (SG) contributions into a corporate master trust. A corporate master trust is just like a master trust for individuals but on a much larger scale. As at December 2017, there are 125 retail super funds. If you visit a financial adviser you may also hear the terms ‘super wrap’ and ‘master trust’ and ‘platform’(which is how you access the wrap). These two/three categories generally offer you access to lots of managed fund investments, and fall under the category of ‘retail funds’.
Note: In addition to the 594,944 super entities (that is, large super funds – 207, and small super funds – 594,737), there are also 81 super entities that fall into the categories of: pooled superannuation trusts (39), single member Approved Deposit Funds (ADFs) (12), exempt schemes (19) and Retirement Savings Accounts (11). Note also that 8 eligible rollover funds, and 3 multi-member ADFs are spread across the 4 types of managed super funds, most likely in the retail and industry fund categories, but are already included in the 207 large super funds.
Retirement Savings Accounts: Although not considered a super fund, you can also choose a Retirement Saving Account, which is a bank-savings-account- style of super product. You can choose from 11 RSAs. An RSA is a low-risk and low-return superannuation account provided by banks and other financial organisations. RSAs, however, are more a parking vehicle rather than a long-term investment option. RSAs represent less than one-tenth of a mere 1 per cent of all money invested in the superannuation market.
Note: If you have lost track of your super, your retirement savings may have been transferred to an Eligible Rollover Fund, or even to the Australian Tax Office. For more information on lost super, see SuperGuide article How to find your lost super in 4 steps.
Important note about MySuper: Since 1 January 2014, if you have not actively chosen your super fund, your employer’s super contributions may have been redirected to a new super fund, known as a MySuper product, while your existing superannuation balance remained in your previous super account. In many cases, your existing super fund may have been rebadged as a MySuper product. And since July 2017, if your post-January 2016 employer’s SG contributions have been redirected to a new MySuper product, then those 2 super accounts (pre-Jan 2014 and post-Jan 2014) must then be combined into the MySuper product. With the exception of self-managed super funds, nearly all types of super funds (see below) offer MySuper products. If you have actively selected your super fund, then the new MySuper products are not relevant. (For more information about MySuper, see SuperGuide articles MySuper: Now at a super fund near you and MySuper: 113 super funds now available).
Type and Number of Super Funds in Australia
|Type of Fund||Number of Super Funds|
|June 2009||June 2011||June 2014||June 2016||June 2017|
|SMSFs (DIY super funds)||404,146||442,987||526,275||568,315||596,516|
|Small APRA funds||4,277||3,519||2,408||2,022||2,071|
*The Total in the table includes eligible rollover funds, but excludes Retirement Savings Accounts, single-member approved deposit funds (ADFs), pooled superannuation trusts and exempt schemes.
Source: December 2017 statistics extracted from Statistics, Quarterly Superannuation Performance, December 2017 (issued 27 February 2018). June 2016 statistics extracted from same document. June 2014 statistics extracted from Statistics, Quarterly Superannuation Performance, June 2015 (issued 20 August 2015), Australian Prudential Regulation Authority. Earlier years sourced from previous APRA reports.
Can I choose any type of super fund?
Unless you’re already a member of a company fund (although some company super funds permit relatives of employees to become members) or, you’re already a member of a public sector fund, an individual can generally only choose from three types of super funds:
- Industry funds
- Retail funds
- Small super funds. The typical option is a SMSF, also known as DIY super fund. The other type of small super fund is a small APRA fund, which could also be classified as a retail super fund.
For more information…
For more information on the types of super funds, and comparing super funds, see the following SuperGuide articles:
- Fund choice: Comparing super funds in 8 steps
- Super for beginners, part 11: Is my super fund good enough?
- Investment performance: Benchmarking super fund returns
- Super for beginners, part 20: Comparing your super fund’s performance
- Kingpins of super: 20 largest super funds
- SMSFs: Is DIY super right for you?
- SMSFs: How much does a DIY super fund cost?
- Comparing funds: List of all superannuation funds