When compulsory super was introduced by the Keating Labor government in 1992, few predicted the extraordinary growth of total superannuation savings to the nearly $5 trillion it represents today.
Initially, most workers joined the fund suggested by their employer. Fast-forward to 2026, and there is more complexity and a wider range of differently structured super funds from which to select.
It’s important to keep abreast of your options by fully understanding the type of fund you’re in, and whether it’s time to review other options, and if so, what you need to consider.
The following covers the three broad types of fund, with a note on two others. Read on to identify your fund type and what it delivers.
1. Choice funds
As the name suggests, a choice fund is a super fund that the member chooses. Let’s say you start your first job at the local ice-cream store. It’s compulsory for the employer to pay 12 per cent of your wage into the super fund of your choice.
They may recommend one that suits your industry. But you can instruct your employer to contribute your super to any other fund you prefer. If you don’t do this, your employer can assign your savings into a MySuper option – a default fund for those who have not selected a fund or investment settings.
A government initiative, MySuper has been designed as a simple, low-fee solution for those who don’t want to make active decisions about their super. Choice funds can be divided into two general categories: industry funds or retail funds.
Industry funds: As the name suggests, industry funds originally represented a band of workers doing a specific type of work, such as hospitality, transport or teaching in universities. Initially closed to other workers, most are now public offer funds, meaning anyone can join.
The names of the funds have evolved to reflect this change, from industry-specific to brands such as Aware, Brighter and Australian Retirement Trust. Industry funds operate as “profit-to-member” funds and have fees set low to deliver more benefits to members.
It’s possible that you could establish any one of these types of funds. It’s unlikely all would suit your personal financial situation.
Retail funds: Retail funds, by comparison, were traditionally offered by banks or insurance companies. These funds were always open to any members – i.e. public offering. Some are profit-to- member, but some are “for-profit” (earnings are distributed to the company and shareholders).
For many years, as industry funds gained weight in members and funds under management, retail funds showed less impressive returns. More recently, the retail funds have lowered their fees, and new entries such as Vanguard are targeting younger members.
As with the industry funds, many are also developing hybrid digital advice support. Both industry and retail super funds are regulated by the Australian Prudential Regulation Authority (APRA).
2. Platform funds
Also known as wrap, or master trusts, these funds offer a distinctly different member experience. While you can open a direct individual account with some, most platforms encourage members to join through a financial adviser.
Platforms vary from industry and super funds because they offer a platform or administrative system that allows the saver/investor member to combine management of shares, super and other investments, including property, and receive one consolidated report.
Fees for platform funds are generally higher than those for industry and retail funds, and ongoing advice consultations are usually encouraged. They are regulated by the Australian Securities and Investments Commission (ASIC).
Recent research by Connexus Institute shows a major outflow over the past 12 months from choice funds to platform funds, particularly Netwealth and Hub24.
3. Self-managed super funds (SMSFs)
Successfully running an SMSF is not for the faint-hearted. Yes, many will suggest that they are easy to set up – but the point of super is not to start, but to finish well – i.e. to maximise your wealth at a better rate than if it was in another type of fund.
Unlike choice funds, SMSFs are overseen by two regulators: the Australian Taxation Office (for compliance with super and tax laws) and ASIC for financial advice and auditors.
There are 661,000 SMSFs in Australia, covering 1.22 million members (7.2 per cent of all super fund members but 25 per cent of the pool of super savings) often held by high net worth people and business owners.
One question frequently asked is: at which point does it become viable to establish an SMSF? The amount varies according to whoever is replying – but it’s generally agreed that below a $250,000 balance, the costs will outweigh the benefits. The average starting balance, according to accountancy group, H&R Block, is $400,000.
Apart from the fees associated with establishment of an SMSF and annual running costs, the most important requirement is that, as a trustee, you have the time, expertise and diligence to actively manage your fund.
Or if you don’t, you have access to a qualified professional who can do this for you. There are two other fund types that are less common. These are public sector funds, which are available to government employees, and corporate sector funds, which are generally set up by a company for its employees only.
Which fund is right for you?
While it’s possible that you could join or establish any one of these types of funds, it’s unlikely all would suit your personal financial situation. It’s important that your fund is closely aligned with your:
- level of savings
- complexity of income, assets and investments
- expectation of returns
- needs and goals
- preferred level or involvement, and therefore
- your required level of support.
Where to find out more? The Moneysmart website offers a useful summary of the features and benefits of different types of super fund. For more detail on platforms, the overview on SuperGuide is helpful.
Kaye Fallick is an author, publisher, commentator and retirement income “explainer”, as well as co-creator of the Retirement Affordability Index.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their personal circumstances before making any financial decisions.