They are all different, and I have summarised some the most common types of super in the marketplace with a brief description:
Government Super – if you work in any level of government you will have this type of super. Some funds offer some great contribution benefits and if you have been in the government for a while, you might still have a Defined Benefit account. I strongly urge you to seek advice before converting it to an accumulation account.
Industry funds – these are the funds often associated with unionised industries, which means that employees working in these particular industries usually have an account. Industry funds offer basic superannuation and insurance benefits to a vast number of employees at an affordable price.
A Personal Super Fund – these are retail funds that offer considerably more member control by offering a wide range of managed fund options, plus insurance that can be tailor to your specific needs. Administration and investment fees are a little higher but you get what you pay for.
A Superannuation Wrap – a form of personal super which offers direct investments (e.g. direct shares, term deposits) in addition to a wide range of managed funds. The administration fees are a little dearer still but the wrap offers the highest level of choice and control, short of moving to a self-managed fund.
A Self-Managed Super Fund – these are the DIY funds usually owned and operated by families. Up to 4 members are allowed at any time, and every member must also be a trustee, thereby ensuring each member is totally responsible for the fund. SMSFs allow very wide control and influence over investment, taxation and estate planning, but there are some very strict rules to observe, administration to do, and reporting deadlines to meet.
So which super fund is right for you?
To answer that, you need personal advice. I don’t promote any type of fund over another. All funds serve a good purpose to different sections of the superannuation market. It is about matching an appropriate fund to your individual needs.
Quite often I find that the fund people are in is just fine, but they are simply not doing enough within that fund to make it work better for them.
However, I would give you a few words of caution. If it is a Self-Managed Super Fund (SMSF) that you believe you want, then I strongly urge you to seek advice. The reason for the caution is that whilst it might be appropriate to your needs, you can get a lot of things wrong because you are inexperienced. There is much more to it than just the set-up. You will need expert guidance through the first couple of years at least, until you get used to it.
This is general advice and educational information only, designed to increase your general knowledge of superannuation. As a financial adviser, I strongly urge people to seek professional advice before making any decision about superannuation. As this article suggests, there are many choices in the superannuation market and which type of fund to choose depends entirely on individual needs and circumstances.