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Investor Education > Superannuation > Superannuation choice


In July 2005, Superannuation Choice of Fund legislation was introduced. This means that most Australians are able to choose which super fund they would like their superannuation guarantee paid to. Superannuation choice meant that, if eligible, you can invest in a super fund that suits their needs whilst saving for their retirement instead of the super fund your employer has picked out for you. Many people do not realise how easy it is to switch between investments within their super.

How does it work?
If you are eligible to select your super fund, your employer will provide you with a Standard Choice Form within one month of commencing employment. Outlined in the form are two options for your superannuation choice. You can either select the default fund set by your employer or you can choose your own super. Your employer is then obligated to accept your choice of fund within two months.

You don't have to exercise your choice of super fund - where this occurs your employer will contribute to a super fund of their choice, usually a default corporate super fund. These funds are typically one size fits all and may not be necessarily be the most appropriate for you.

Choosing your fund
In exercising superannuation choice, you should read the relevant product disclosure statement for the potential superannuation fund. The product disclosure statement tells you what you need to know including:

  • Fees and costs that you will pay
  • Death and disability benefits and insurance premiums
  • Investment strategies that you may be able to choose
  • Objectives of each investment strategy, it's risks and likely returns
  • Fund features and services

Your superannuation is your investment for your retirement, a better choice will result in the best benefit for your future. When selecting a super fund, make sure you compare insurance and retirement benefits. It is worth taking the time to understand the benefits and costs of super funds.

The effect of fees
The final value of your benefit for retirement will depend on how much money you and your employee contribute and how much the fund earns overall from investing after deducting costs and taxes. The more fees you pay, the more your super fund must earn to make up for the fees. Some super fund fees can be avoided. 2020 DIRECTINVEST rebates 100% on entry fees on superannuation funds including personal and employer contributions and rollovers and we do not charge adviser service fees. Click here to find a superannuation fund or to find out more about fees in super funds.


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