Types of Super Funds
Six types of super funds exist. These six types fall into two categories. The first category is referred to as "all profits to members" funds. The second category is called "for profit" funds. In general, "all profits to members" funds have better returns with lower costs in comparison to "for profit" funds. Types of super funds are determined by how the fund is managed. Here is some basic information of the six main types of super funds.
Types of Super Funds: Industry Super Funds
Industry super funds are "all profits to members" funds. These funds are designed to cover the employees of entire industries. Employer groups and unions join together to establish industry funds. In comparison to other types of super funds, industry super funds have been known to outperform "for profit" funds.
Types of Super Funds: Corporate Funds
Corporate funds are established by employers who want to have their own company-based super funds. Since corporate funds are often established by a single company, the trustee body is made up of both employers and member representatives.
Types of Super Funds: Public Sector Funds
Unlike other types of super funds, public sector funds are established by State or Federal Governments. Public sector funds originally provided better compulsory rates than other types of super funds. Now, however, many Governments in Australia are observing the compulsory minimums for the supers of new employees.
Types of Super Funds: Retirement Savings Accounts (RSAs)
RSAs are "for profit" funds that are meant to gain profits for financial institutions. While RSAs can be costly, they are often more secure because of the financial background of the institutions that run the fund.
Types of Super Funds: Retail Funds
Retail funds are also referred to as "retail master trusts". These funds are set up by groups of employers. As "for profit" funds, these multi-employer funds usually invest in stock markets such as the Australian Securities Exchange.
Types of Super Funds: Self Managed Superannuation Funds (SMSFs)
SMSFs are super funds with less than five members. Usually, these funds are set up individually, or by a family. Since these funds are not tied to industries, employers or retail groups, they are often more costly to run than other types of super funds.