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Investor Education > Superannuation > Types of Superannuation Funds


There are different types of superannuation funds. Superannuation funds can be categorised into two broad categories:

  • For profit funds for the super fund owners such as retail superannuation funds.
  • All profits for their members as industry super funds.

There is a lot of debate as to which category of fund is better than the other so it is important to understand the key differences, their advantages and disadvantages. The following are the main types of superanuation funds investors may join.

Retail Superannuation Funds

For Profit funds are also known as retail superannuation funds. Retail superanuation funds are run by financial institutions and are open for investment by to the general public. Within retail superannuation the most popular super fund option is a master trust.

Master Trusts
Master trusts pool accounts for investment and have single corporate trustees and trust deeds that allow many individuals and companies to participate. They are offered to the public by fund companies and banks and operates as an investment platform. Master trusts are characterised by offering a broad range of multi-manager and single sector investment options managed by leading fund managers sourced by the superannuation trustee.

Advantage Disadvantage
You can generally access the same investment options and fund managers that you can invest with outside of super so investors can take full advantage of the tax concessions of investing inside super.

Master trusts will offer various benefits, such as death, total and permanent disability and salary continuance benefits which are often provided by related life insurance companies.
There may be unnecessary fees associated with master trusts. As retail super funds pay adviser commissions, investors may be paying entry / contribution fees on each contribution that is made as well as adviser commissions if the super fund was set up via an adviser.

This can be easily avoided through services like 2020 DIRECTINVEST. We offer 100% entry fee rebate and charge no adviser service fees on retail superannuation master trusts.

Super master trusts are generally set up as personal super accounts for individual consumers. Some employers may choose a employer master trust as the default super fund for their company in which case investors will have the option of becoming an employee member of a retail master trust.

Corporate Super Funds
Corporate superannuation options are generally only open to people working for a particular corporation, in some organisations membership is made available to ex-employees or relatives of existing employees. By law, employers must offer a default super fund option for their employees as an alternative to exercising Choice of Fund rights for those who do not wish to choose their own super fund. Corporate super funds can be set up with through retail master trusts or in some cases, employers may choose to operate their own employer-sponsored super funds.

Advantage Disadvantage
Depending on the size of the organisation, corporate super funds may enjoy a number of benefits as a result of their size.

Large organisations can negotiate special fee arrangements that are lower than retail personal super funds whilst accessing the same or similar range of investment options.
In many cases corporate super funds are only available for people working at the organisation. If you cease employment with the company you will no longer be able to contribute future superannuation contributions to the fund.


Retirement Savings Accounts (RSAs)
Retirement savings accounts are established for holding superannuation savings. They operate much like bank accounts, except where restrictions apply upon withdrawals like regular superannuation accounts. They are run for profit by financial institutions such as banks, building societies, credit unions or life insurance companies.

Advantage Disadvantage
They are low-risk products and may have lower levels of fees and charges compared to regular super funds. Many accounts may also include death and disability insurance benefits. Super savings are invested into bank deposits and therefore usually pay lower rates of interest than regular super funds, resulting in lower rates of return.

Profit for member funds

In contrast, profit for member funds does not deliver profits to shareholders but members instead. In general, profit for member funds tend to be available to employers working for particular industries.

Industry Funds
Industry super funds are multi-employer funds operated by parties to industrial awards, usually employer associations and unions. They primarily offer services to members of a specific industry, such as retail workers, hospitality workers and builders.

Advantage Disadvantage
All profits made are returned to members’ accounts, rather than paid to shareholders.  Lower fees are involved with no commissions paid to the financial adviser. Investment options are generally limited to a small selection of investment options available. Industry fund options are usually limited to 10 multi-sector investment options (eg. Growth, Conservative, Balanced) in contrast to up to 100 multi- and single-sector options available to retail investors.


Self Managed Funds
Self managed super funds are also known as DIY super funds. They can have up to four members and are generally established by an individual or a family from their own superannuation savings. Members of the fund must also be trustees, unless a corporate trustee is appointed, and are responsible for the all investment and compliance decisions of the fund, including administration, trusteeship and taxation. More information on self managed superannuation.

Advantage Disadvantage
Managing your own super can offer greater control and access to a broader range of investment options such as shares, direct property and alternative asset classes not available to convention super funds. Self-managed funds can become very costly to run and all members are held responsible for their decisions, such as where legislative compliance is concerned.

Public Sector Funds
Public sector funds provide superannuation for employees in the public sector. They are run and structured with the same benefits as industry funds, and include funds established for public servants and for employees of statutory authorities and local Government. In Australia, the Commonwealth government has set up statutory superannuation funds for its public servants, such as the Commonwealth Superannuation Scheme, the Public Sector Superannuation Scheme and the Military Superannuation and Benefits Scheme. The schemes provide generous death and invalidity benefits. It may also be possible to obtain salary continuance insurance cover.


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