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$387

11.80%

4.80%

9.70%

  • Industry fund
  • Income protection insurance

$457

15.40%

5.80%

8.30%

  • Industry fund
  • Income protection insurance

$477

13.20%

6.30%

7.30%

  • Industry fund
  • Income protection insurance

$457

12.80%

5.60%

6.90%

  • Industry fund
  • Income protection insurance

$422

13.70%

5.10%

6.90%

  • Industry fund
  • Income protection insurance

$618

12.00%

3.10%

5.60%

  • Retail fund
  • Income protection insurance

$507

6.00%

4.90%

5.20%

  • Industry fund
  • Income protection insurance

$397

11.00%

4.00%

5.00%

  • Industry fund
  • Income protection insurance

$337

8.20%

3.20%

3.70%

  • Industry fund
  • Income protection insurance

$711

19.40%

6.20%

11.00%

Super - Growth X
  • Retail fund

What’s new in superannuation in March 2023?

Retirement is something most of us set aside money for while we’re working, so we can financially support ourselves when we’re no longer earning an income. As we progress through our career and approach our senior years, this begs the question, ‘when should I retire?’. Consider a range of factors before handing in your resignation notice.

If you’re close to retirement, you might be pondering the best ways to access the funds in your super. An increasingly popular method is retirement income streams - regular payments with some tax benefits.

The Australian Taxation Office (ATO) recently revealed that there is $16 billion in lost and unclaimed superannuation, with the balance of these savings having grown by around $2.1 billion since the last financial year. Additionally, data shows that around one in four Australian workers are holding two or more retirement accounts.

Although super is compulsory, your employer may withhold the super guarantee (SG) or not pay the full amount into your account if you’re not paying attention. That’s why it may be sensible to check both your pay slips and your actual superannuation account from time to time to ensure you’re receiving the correct amount.

All superannuation funds charge fees. What you may not realise is that there are a number of different fees depending on the type of fund you have, your balance, and the activity on your account. RateCity has crunched the numbers to reveal the minimum, maximum and average fees paid by Australians across different age groups.

If you’re a low income earner, finding a fund that charges lower fees may help you maximise your retirement savings.

RateCity's superannuation comparison tables can help you compare your fund against others to see how it stacks up.

Updated by Peter Terlato on 7 March 2023

What is superannuation?

Superannuation (also known as ‘super’) is a compulsory savings scheme through which some of your income is set aside so you can have a nest egg waiting for you when you retire.

Different super funds offer different investment options to help you grow your retirement savings. There are also extra features, benefits, fees and charges to consider. It's important to compare different super options to make sure you choose a fund that best suits your financial situation.

How does superannuation work?

If you are an eligible employee in Australia, your employer is responsible for paying your superannuation into your super fund account throughout the duration of your employment. Your employer will pay your super into your existing super fund, or set you up with a MySuper product if you are new to the workforce.

In accordance with current Australian Government outlines, your annual superannuation entitlements must be at least 10 per cent of your ordinary time earnings. For example, if you earn $100,000 per annum (before tax), your employer must pay you at least $10,000 in super per financial year. This is known as the ‘superannuation guarantee’ or SG.

The super guarantee contribution rate increased from 9.5 per cent to 10 per cent in July 2021, and is scheduled to increase by 0.5 per cent each year until it reaches 12 per cent in mid-2025. However, these increases to the super guarantee rate could be delayed, depending on Australia's economic situation. 

You may choose to pay extra money into your super fund, on top of what your employer is required to pay. This could include one-time payments, or a regular salary sacrifice arrangement with your employer. Some of these extra super contributions may be tax deductible. For more details, check with the ATO by visiting ato.gov.au.

Many super funds invest your super contributions into an investment portfolio. This may help grow your wealth faster than you’d likely earn in interest simply by depositing this money in a retirement savings account or term deposit. Different investment strategies may mean different returns on your investments.

Once you reach a certain age, you can start accessing money from your super fund as an income stream. This can help pay for your retirement lifestyle, reducing your reliance on the age pension.

Does every employer have to pay superannuation?

Whether or not your employer is obligated to make payments towards your superannuation will largely depend on the nature of your employment:

  • If you're a full-time employee aged 18 years or older, your employer will typically be required to pay you the super guarantee.
  • If you're a part-time employee aged 18 years or older, you must earn a pre-tax income of at least $450 per calendar month to receive the super guarantee.
  • If you are under the age of 18, you must earn a pre-tax income of at least $450 per calendar month, and work more than 30 hours per week, to receive the super guarantee.

However, according to the ATO, the minimum income requirement is set to be removed by 1 July 2022. This means that all employees will be paid the super guarantee by their employer if they satisfy the other eligibility requirements. This applies to most Australian citizens and temporary residents.

Those who are self-employed such as small business owners, freelancers and other sole traders are responsible for making their own super contributions if they choose to. While it's not a legal requirement to pay your own super, it's something worth considering as a way to save for retirement.

How much does superannuation pay?

The super guarantee determines how much super your employer will pay you. At the time of writing, the super guarantee is 10 per cent of your ordinary time earnings, and is legislated to progressively increase to 12 per cent by 1 July 2025.

Employers must make SG contributions into your super account at least once every three months, in line with the quarterly super payment due dates set by the Australian Taxation Office (ATO).

Quarter PeriodPayment due date
11 July - 30 September28 October
21 October - 31 December28 January
31 January - 31 March28 April
41 April - 30 June28 July

Source: ato.gov.au

When you start a new job, your employment contract will stipulate whether your income is inclusive of super or your super is paid in addition. 

If your income is inclusive of super, the SG will be taken out of what you earn, reducing your take-home pay. On the other other hand, if your super is paid in addition to your income, your employer is responsible for paying you the SG on top of your income.

It's important to note that if your contract states that your income is inclusive of super, each time the SG is increased this could mean that your take-home pay is further reduced. It's worth keeping this in mind when you sign a new employment contract.

How does this add up to a retirement payout?

Because you are unable to access the funds in your super account (apart from rare exceptions) until you reach retirement age, your account balance should see steady growth from SG deposits and any voluntary contributions made throughout your career. In addition to this, it should also experience growth from compounding interest over a number of decades until you reach retirement age.

A combination of these two factors should result in nest egg that can help fund your retirement.

What types of superannuation funds are there?

There are five main types of superannuation funds:

Fund Description Availablity
Retail super fundsRun by for-profit institutions such as banks and financial services companiesEveryone 
Industry super fundsRun by not-for-profit institutions to benefit membersMany larger industry funds are available to everyone, while some restrict membership to certain industries
Public sector super fundsCreated for federal and state government departmentsPublic servants
Corporate super fundsRun by companiesEmployees of those companies
Self-managed super fundsSMSFs are for Australians who want to manage their own investmentsEveryone

Most super funds are accumulation funds. When you retire, the fund will pay you whatever superannuation you saved up during your working life.

Some corporate or public sector super funds are defined-benefit funds, though most are closed to new members. When you retire as an eligible employee, you’ll receive payment based on a formula. For example, you might receive ongoing retirement income calculated as a percentage of your final salary. You might instead receive a lump sum calculated on the number of years you spent with your employer.

What is a MySuper fund?

MySuper is a government initiative that was introduced to replace the previous default funds system in order to provide lower cost, more simplified alternatives. If you don't have an existing super fund account when you start a new job, and don't nominate a new one yourself, your employer must pay your employer contributions into a MySuper fund.

MySuper products typically offer:

  • Lower fees
  • Simple features so you don't pay for services you don't need
  • Life insurance unless otherwise requested

How do you compare superannuation?

Australians have access to hundreds of superannuation funds and tens of thousands of investment options. It’s important to do your research to find the best super fund and best investment option for you, as choosing the wrong super fund or investment option can be costly.

There are five main factors to consider when choosing a superannuation fund:

1. Fees

You may prefer to pay low fees than higher fees when it comes to your superannuation, but keep in mind that a fund with higher fees might still offer better value than one with lower fees.

Some of the fees you may be charged include:

  • Administration fees
  • Investment fees
  • Financial adviser fees
  • Switching fees
  • Buy-sell spread fees
  • Activity-based fees
  • Indirect costs
  • Insurance premiums

2. Investment options

It's worth researching the different investment options being offered with different super funds to make sure you’re comfortable with:

  • The amount of risk you would be taking;
  • The asset classes you would be investing in, and;
  • How much of your super would be going to each asset class.

You may also want to consider how the investments align with your personal values. For example, many super funds now offer ethical investment options that have socially or environmentally beneficial priorities.

You can change your investment options to reflect changing personal circumstances or different stages of your career, but keep in mind that your fund will typically charge a fee for doing so.

3. Investment performance

It's important to research how each fund's investment options have been performing, such as by looking at their net investment returns (i.e. after fees). While past performance isn't a reliable indicator of future performance, Moneysmart suggests comparing the performance of different funds over the last five years.

Even a slight variation in performance has the potential to significantly affect your super balance over the life of your career.

When doing your research, it’s important to ensure you’re comparing apples with apples in order to make a fair comparison. This means comparing super funds of the same type, as well as the same risk profile. RateCity's super comparison table can help with this.

4. Insurance

Super funds commonly offer three different types of insurance:

  • Life insurance
  • Total and permanent disability insurance
  • Income protection insurance

If you’re interested in a super fund with insurance, consider investigating the premiums and conditions.

5. Customer service

You may also want to learn more about what sort of customer service you might receive from different super funds. This might involve comparing the promises made by funds in their marketing with the feedback left on online review sites.

Some customer service offerings also come at a cost, such as receiving financial advice, so be sure to look into this.

How do you claim your superannuation?

Generally, you can only access your superannuation if:

  • You’re permanently retired and you reach your ‘preservation age’, which is between 55 and 60, depending on when you were born, or;
  • You’re still working and you turn 65.

Once you are eligible to withdraw your superannuation, you will typically have the option to receive it as a lump sum, an ongoing retirement income stream, or a combination the two.

Can you withdraw your superannuation early?

There are a number of special circumstances in which you may be eligible for an early release of your super, including the following:

  • If you’ve suffered permanent or temporary incapacity
  • If you’ve received commonwealth benefits for 26 continuous weeks but still can’t meet your immediate living expenses
  • If you’re seriously ill and need to pay for medical treatment
  • If you have a terminal condition and are likely to die within two years

Consider visiting the ATO website for more detailed information on early super withdrawal.

How do you find the best super fund?

The best superannuation fund is the one you believe will offer you the best value. Each person will have their own definition of ‘best’, depending on what they prefer.

For example, you may want to look for:

  • The fund that has delivered the highest net returns/strongest performance over the past five years
  • The fund that has earned the highest approval ratings on online review sites
  • The fund that has investment options that best align with your own values

Those are just examples – you might have your own definition of what makes for the best super fund. Using comparison tools such as RateCity's superannuation comparison table can make it easier to focus on the factors that matter to you most.

How much superannuation should you have?

our superannuation will make a big impact on the kind of lifestyle you'll be able to afford once you retire. So, regardless of how far off retirement is for you, it's a good idea to keep an eye on your super balance and be proactive if it's below where you'd like it to be.

The Association of Superannuation Funds of Australia (ASFA) has estimated how much money you'll need in retirement, based on your preferred lifestyle.

Budgets for various households and living standards for those aged around 65 (June quarter 2021, national)

 Modest lifestyle Comfortable lifestyle
SingleCoupleSingleCouple
Total per year$28,514$41,170$44,818$63,352

Source: ASFA. Notes: The figures in each case assume that the retiree(s) own their own home and relate to expenditure by the household. This can be greater than household income after income tax where there is a drawdown on capital over the period of retirement.

ASFA figures show that the amount you should have in your super when you retire to support a comfortable retirement lifestyle is $640,000 for a couple and $545,000 for a single person - assuming a partial Age Pension.

Meanwhile, ASFA estimates that a modest retirement lifestyle is mostly covered by the Age Pension. In which case the amount of superannuation needed to support a modest retirement lifestyle for a single or couple is $70,000.

According to ASFA, a modest retirement lifestyle is "considered better than the Age Pension, but still only able to afford fairly basic activities", while a comfortable retirement lifestyle "enables an older, healthy retiree to be involved in a broad range of leisure and recreational activities and to have a good standard of living through the purchase of such things as; household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel".

If you plan to retire at 65, it's important to keep in mind that you'll likely need a retirement income for at least 20 years.

Parents who have taken time out of the workforce to care for children, as well as low income earners, will tend to have less superannuation than those who have been employed continuously, on an average to high income, for the four or five decades of their career. If this is the case for you, you may want to consider making voluntary contributions on top of the super guarantee if your budget allows.

Moneysmart's retirement planner calculator can help you calculate the income you're likely to get from super and the age pension when you retire, based on your personal financial details.

How often should you check your super?

Regularly checking your super fund's performance will allow you to see whether it remains competitive against the rest of the market.

MySuper products are now subject to an annual performance test by the Australian Prudential Regulation Authority (APRA), introduced as part of the Australian Government’s Your Future, Your Super reforms. If you are a member of a MySuper fund that fails the performance test, your fund must let you know so that you can make the choice to switch to a better performing fund. However, if you are not a member of a MySuper fund, your fund will not be subject to these tests. So, you might want to consider checking your super yourself at least once every 12 months. 

Some super fund members get into the habit of checking their super balance every quarter, once the super guarantee payment due dates have passed, to ensure their employer's contribution has cleared.

If you're still a member of the fund you signed up for at your very first job, you may also want to check other details such as who your beneficiaries are, the types of fees you are paying and what kind of insurance you may be covered by.

Can your super amount rise and lower over time?

Your super account balance can fluctuate from time to time, depending on various factors such as market conditions and the performance of your investment options.

Growth investment options are generally more likely to experience fluctuations compared to conservative investment options. For this reason, those closer to retirement age are more likely to choose to have their retirement funds invested in a conservative option.

While minor drops balanced with rises shouldn't be a concern in general, particularly if you are more than five years away from retirement, it is important to monitor your fund to ensure it's not experiencing a more consistent downturn.

How can you grow your super?

  1. Pre-tax super contributions: Also known as salary sacrifice, pre-tax super contributions can be paid out of your pre-tax income by your employer, at your request. These payments, along with the super guarantee, make up what is known as your concessional contributions.
  2. After-tax super contributions: If you reach the concessional contribution cap, there’s also the option to make super contributions from your after-tax pay. These payments are known as non-concessional contributions, as you will have already paid tax on this money. Low and middle-income earners who make after-tax super contributions may also be eligible to receive a co-contribution from the government, up to a maximum amount of $500.

These types of contributions are considered voluntary superannuation contributions, and can be made in addition to employer contributions (namely the super guarantee).

To find out more about government co-contributions and to see if you are eligible, visit the ATO website.

How do you find lost superannuation?

Lost superannuation refers to savings in a super fund account that you may have forgotten about. This can happen if you've opened a new super fund account each time you've started a new job, instead of nominating an existing account.

You can use your MyGov account to see details of all your superannuation accounts, including any you might have forgotten. Alternatively, you can fill in a ‘Searching for lost super’ form and send it to the Australian Taxation Office, which will then search on your behalf.

Once you've found your lost super, the next step is to consolidate your funds into a single account of your choice. You can either do this yourself via your MyGov account, or get in touch with your chosen fund to see if they are able to consolidate for you.

What is an SMSF trust deed?

If you want to have more control over your retirement savings and how they’re invested, you can consider choosing to set up a Self-Managed Superannuation Fund (SMSF). The SMSF would be used instead of putting your money in an industry or retail super fund.
 
The rules for operating an SMSF are outlined in a legally binding document known as the SMSF trust deed. It lays out the fund's purpose, which should be limited to providing retirement benefits to fund members. An SMSF trust deed also contains: 

  • The names of the members and trustees
  • The procedure for appointing and removing trustees
  • The specific types of investments that the fund can make
  • How the benefits will be paid out at retirement (as a lump sum or in the form of an income stream) 

Once the SMSF trust deed is finalised, an SMSF must be operated according to the procedures laid out in the deed. If the SMSF does not function according to the trust deed, severe penalties may be imposed on the members and trustees of the fund. If the SMSF is audited, the members are required to provide the trust deed to help the auditor check whether the fund's operations comply with the deed or not.
 
If you plan to set up an SMSF, you can purchase a standard SMSF trust deed online. You can also have a financial advisor assist you with the setup and have them draw one up. It’s also essential to review and update your SMSF trust deed from time to time to keep it up to date with any changes to superannuation legislation. If you want to change the SMSF investment strategy or invest in an asset not listed in the trust deed, you’ll need to revisit the trust deed and update the provisions to ensure there is no conflict.

What is superannuation?

Superannuation is money set aside for your retirement. This money is automatically paid into your superannuation fund by your employer.

Can I buy a house with my superannuation?

First home buyers are the only people who can use their superannuation to buy a property. The federal government has created the First Home Super Saver Scheme to help first home buyers save for a deposit. First home buyers can make voluntary contributions of up to $15,000 per year, and $30,000 in total, to their superannuation account. These contributions are taxed at 15 per cent, along with deemed earnings. Withdrawals are taxed at marginal tax rates minus a tax offset of 30 percentage points.

Voluntary contributions to the First Home Super Saver Scheme are not exempt from the $25,000 annual limit on concessional contributions. So if you pay $15,000 per year into the First Home Super Saver Scheme, you have to make sure that you don’t receive more than $10,000 in superannuation payments from your employer and any salary sacrificing.

How do you set up superannuation?

Before you set up a superannuation account, you’ll need to check if you’re allowed to choose your own fund. Most Australians can, but this option doesn’t apply to some workers who are covered by industrial agreements or who are members of defined benefits funds.

Assuming you are able to choose your own fund, the next step should be research, because there are more than 200 different superannuation funds in Australia.

Once you’ve decided on your preferred superannuation fund, head to that provider’s website, where you should be able to fill in an online application or download the appropriate forms. You’ll need your tax file number (assuming you don’t want to be charged a higher tax rate), your contact details and your employer’s details (if you’re employed).

How long after divorce can you claim superannuation?

You or your partner could be forced to surrender part of your superannuation if you divorce, just like with other assets.

You can file a claim for division of property – including superannuation – as soon as you divorce. However, the claim has to be filed within one year of the divorce.

Your superannuation could be affected even if you’re in a de facto relationship – that is, living together as a couple without being officially married.

In that case, the claim has to be filed within two years of the date of separation.

Either way, the first thing to consider is whether you’re a member of a standard, APRA-regulated superannuation fund or if you’re a member of a self-managed superannuation fund (SMSF), because different rules apply.

Standard superannuation funds

If your relationship breaks down, your superannuation savings might be divided by court order or by agreement.

The rules of the superannuation fund will dictate whether this transfer happens immediately, or in the future when the person who has to make the transfer is allowed to access the rest of their superannuation (i.e. at or near retirement).

Click here for more information.

SMSFs

If your relationship breaks down, you must continue to observe the trust deed of your SMSF.

So if you and your partner are both members of the same SMSF, neither party is allowed to use the fund to inflict ‘punishment’ – such as by excluding the other party from the decision-making process or refusing their request to roll their money into another superannuation fund.

This no-punishment rule applies even if the two parties are involved in legal proceedings.

Click here for more information.

Financial consequences

Superannuation funds often charge a fee for splitting accounts after a relationship breakdown.

Splitting superannuation can also impact the size of your total super balance and how your super is taxed.

Click here for more information.

Fact Checked

This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.

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^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, target market determination fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.