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 22 November 2016 (for data as at September 2016).
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’)
- 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 November 2016, there were around 584,000 super funds in Australia (584,154 on September 2016 figures), excluding pooled superannuation trusts (44), single-member ADFs (35) and exempt schemes (19).
Of these 584,154 super funds, a massive 583,924 of these super funds were small funds (super funds with fewer than 5 members). Nearly all small funds are self-managed super funds (SMSFs) (581,736) and a fraction of small funds are small APRA funds (2,188).
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 230 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 September 2016, there are 41 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 September 2016, there are 31 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 September 2016, there are 19 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 September 2016, there are 139 retail super funds. If you visit a financial adviser you may also hear the terms ‘super wrap’ and ‘master trust’. These two categories generally offer you access to lots of managed fund investments, and fall under the category of ‘retail funds’.
Note: In addition to the 584,154 super entities (that is, large super funds – 230, and small super funds – 583,924), there are also 108 super entities that fall into the categories of: pooled superannuation trusts (44), single member ADFs (35), exempt schemes (19) and Retirement Savings Accounts (10). Note also that 8 eligible rollover funds, and 3 multi-member approved deposit funds 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 584,154 entities.
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 10 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 Find lost super in 5 steps, and make quick cash.
Type and Number of Super Funds in Australia
|Type of Fund||Number of Super Funds|
|June 2009||June 2011||June 2014||June 2015||Sept 2016|
|SMSFs (DIY super funds)||404,146||442,987||526,275||551,623||581,736|
|Small APRA funds||4,277||3,519||2,408||2,200||2,188|
*The Total in the table excludes eligible rollover funds, Retirement Savings Accounts, approved deposit funds (ADFs), pooled superannuation trusts and exempt schemes.
Source: September 2016 statistics extracted from Statistics, Quarterly Superannuation Performance, September 2016 (issued 22 November 2016). June 2015 statistics extracted from Statistics, Quarterly Superannuation Performance, December 2015 (issued 23 February 2016). 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.