Superannuation Structure in Australia

Mintee on 09/07/2025 - 10:18

Hello :)

I’m trying to get a better grasp on how superannuation works in Australia beyond just the basics. I understand the general concept money set aside for retirement, concessional contributions, and extra tax for exceeding contribution caps, etc. But I’m still confused about a few key areas and would really appreciate some clarification:

Retail vs Industry Super Funds
I keep hearing that industry funds are generally “better,” but I don’t quite understand why. Is it purely due to lower fees? Are there structural differences or performance-related reasons that make one superior to the other?

Member Count - Why Does This Matter?
Some articles and comparison tools mention how many members a super fund has. Why is that important? Does it impact fees, stability, or performance in some way?

Annual Returns - How Are They Calculated?
The company will generally announce something like "Balanced funds returned this year X%" - I then get my yearly statement says something like “5% return” or “$5k gain” on a $100k balance. But I’m contributing every month so how is that return actually calculated if the balance is changing throughout the year? Are my returns calculated monthly; then summarised to me?

Financial Advisors & Super Recommendations
How do independent financial advisors - lets say I engaged with Verse Wealth(Literally just googled them right now) make money from recommending a particular super product? Theyre not a super fund, so I assume they recommend a platform i.e AusSuper - Do they get a cut/commission or are they supposed to be fee-only? Do they influence which platform you go with (e.g., Hostplus vs Colonial First State) - Do they then have direct input on how your funds are managed within that platform? How do you know which independents are safe and not scams (if you want to engage with them)

Legalities
What are the minimum legal requirements that a super fund has to have; and does this differ? Does a fund have to provide you with any consultation?

I’m not looking for personal advice, just trying to understand how the system works on a structural level

Thanks in advance!

Financial Superannuation

Comments

Protractor on 09/07/2025 - 10:26

-8

https://www.superguide.com.au/how-super-works/beginners-guid…

also google this>
Australian superannuation explained

Enjoy

Thread closed/

Protractor on 09/07/2025 - 10:26 (Collapsed - Offtopic. Show)
- Mintee on 09/07/2025 - 10:37
  
  +9
  
  That actually answers 0 of the questions ive asked above
  - Protractor on 09/07/2025 - 10:53
  - JIMB0 on 09/07/2025 - 11:01
    
    +13
    
    But it fulfills his quest to reply to every thread. He's mastered the art of saying something while contributing very little.
    - Protractor on 09/07/2025 - 11:08
      
      -8
      
      Whereas yours is a deep & meaningful commentary, on my commentary.
    - Drakesy on 09/07/2025 - 11:34
      
      +3
      
      Would make a great politician.
  - AndyC1 on 09/07/2025 - 18:51
    
    -1
    
    Thread closed if you could have just following the simples instructions, so here is small snippet of the page:
    
    How superannuation works: Super for beginners guide
    Barbara Drury
    Barbara Drury
    1 July 2025
    
    In this guide
    
    How did we get here? Putting money in Growing your savings inside super When can I access my super? Taking money out of super What happens to your super when you die?
    
    Simply put, superannuation (or super) is money you put in a super fund while you are working to provide income later in life when you retire. Given the average Australian can expect around 20 years of retirement, and the Age Pension is designed to provide only the most basic needs, the more you can save now the more comfortable and enjoyable your retirement years will be.
    
    For most working-age Australians, super is a right. If you are aged over 18 and are regarded as an employee for tax purposes, your employer must pay money into a super account in your name, which is then managed by a super fund.
    
    This is called the Superannuation Guarantee (SG) and employers are legally bound to contribute 12% of your gross income, including bonuses, commissions and loadings.
    
    If you are under 18 or classified as a private or domestic worker (like a nanny), you must work for your employer more than 30 hours a week to qualify for SG payments.
    
    You can also make voluntary, personal contributions to further boost your savings. For the self-employed, super is entirely voluntary.
    
    Important
    
    Superannuation broadly has two phases:
    
    Accumulation phase
    
    The accumulation phase is the first stage of everyone’s super journey – when you are contributing to your super account and your super balance is accumulating. Contributions during the accumulation phase, and investment earnings on them, are ‘locked away’ (preserved) until at least age 60, except in special circumstances. If you made voluntary contributions prior to 1 July 1999, these are likely to be non-preserved and available to withdraw any time.
    
    Concessional (before tax) contributions and fund earnings in the accumulation phase are taxed at the rate of 15% (up to the concessional contributions cap).
    
    A few government super funds are untaxed and in these funds no tax is payable on contributions or fund earnings. Their members pay higher tax rates when accessing their money to compensate for this.
    
    Retirement phase
    
    Super funds are transferred into the retirement phase when a member starts a super income stream for retirement (or pension). Since July 2017 there has been a cap on the amount that can be transferred into the retirement phase (known as the transfer balance cap). The transfer balance cap is $2 million in 2025–26.
    
    Fund earnings on assets in the retirement phase are tax free.
    
    The retirement phase was called the pension phase until 1 July 2017.
    How did we get here?
Far Cough on 09/07/2025 - 10:37

+2

Just join colonial super lol
/s
- Dr Phil on 10/07/2025 - 21:03
  
  Colonial First State Wholesale Superannuation Fund.
  Excellent Superannuation fund with heaps of Fund choices of every type.
soan papdi on 09/07/2025 - 10:52

+6

Every question of yours can be answered by a simple search. What research have you done before posting here?
- jv on 09/07/2025 - 10:55
  
  +4
  
  Every question of yours can be answered by a simple search.
  
  That applies to lots of things in the forums though…
- Mintee on 09/07/2025 - 17:00
  
  +3
  
  …. obviously im not understanding the research, cant find the level of detail I'm after, as well as want personal opinions…..
  - SlickMick on 10/07/2025 - 09:35
    
    +1
    
    I don't get these jerks on OZB continually replying on forums that forums shouldn't be used for useful purposes.
    
    I like to get general feedback, see if there is anything I haven't already considered, see if there is any consensus. Only then would I do my own research.
    How could anyone possibly research everything on their own? It's be a pretty stupid approach IMO.
jv on 09/07/2025 - 10:54 Comment score below threshold.
- Guybrush57 on 09/07/2025 - 11:14
  
  +1
  
  Isn't Sussan Ley in the same super fund?
  - Protractor on 09/07/2025 - 11:17
    
    +3
    
    Maybe?
    
    Sussan Leys Unique Superannuation Holdings
  - jv on 09/07/2025 - 11:21
    
    -6
    
    Don't know… Ask her.
- Ponsonby on 09/07/2025 - 12:52
  
  No exemption for Commonwealth pollies. Any pollie elected after 2004 is in an ordinary accumulation fund - taxed exactly like any other fund. Those elected before 2004 are in a defined benefit fund - these funds are taxed differently but equivalently, including Div293 and the new Div 296. Only some lucky judges and state pollies get a free kick.
  - jv on 09/07/2025 - 13:36
    
    -7
    
    No exemption for Commonwealth pollies.
    
    Albo's not paying his new super tax, so he is exempt… Even though he will be collecting close to $10,000,000 in super over 20 years paid for by the public.
    - Guybrush57 on 09/07/2025 - 14:34
      
      Same as Sussan
      - jv on 09/07/2025 - 14:42
        
        -1
        
        @Guybrush57: https://www.youtube.com/watch?v=Ri5dCNhj6OI&t=29s
        
        Same as Sussan
        
        She won't be getting anywhere near $10,000,000 over 20 years…
        
        Protractor on 09/07/2025 - 14:49
        
        @jv: Not via the front door,at least. The LNP (Murdochs Muppets.) are a willing commodity for ppl with agendas.
        
        jv on 09/07/2025 - 14:53
        
        -5
        
        @Protractor:
        
        Murdochs Muppets
        
        As opposed to Xi Jinping's Muppets?
        
        Guybrush57 on 09/07/2025 - 15:05
        
        @jv: Albo is leading the country well and Sussan is not leader of the country
        
        Mad Max on 09/07/2025 - 15:12
        
        @Guybrush57:
        
        Probably because Albo is leading the country
        
        to ruin?
        
        jv on 09/07/2025 - 16:07
        
        -2
        
        @Mad Max:
        
        to ruin?
        
        probably put of the 'grand plan'….
        
        jv on 09/07/2025 - 16:06
        
        @Guybrush57: So you agree then, it is not the same…
        
        Guybrush57 on 09/07/2025 - 16:57
        
        @jv: She is in the defined benefits superannuation that is tax exempt.
        
        jv on 09/07/2025 - 16:58
        
        +1
        
        @Guybrush57:
        
        that is **tax exempt.
        
        Shouldn't have 'special' rules for politicians. Especially when it's paid for by tax payers.
        
        Ponsonby on 09/07/2025 - 17:27
        
        @jv: There is no exemption from tax for either the current super scheme for Commonwealth pollies nor the old one that was closed to new members in 2004. The current scheme that started in 2004 is an accumulation scheme just like any other scheme like an industry fund. The old scheme the Parliamentary Contributory Superannuation Scheme is a defined benefit scheme that is subject to tax, including Div 293 and the new Div 296. Yes, the old scheme is generous but tax does apply.
        https://www.finance.gov.au/sites/default/files/2024-12/PCAA-…
        
        jv on 09/07/2025 - 17:36
        
        -2
        
        @Ponsonby:
        
        There is no exemption from tax
        
        There is for Albo, he is imposing a new tax for people with more than $3,000,000 in Super, but exempting himself from additional taxes even though he will make more than 3 times as much. And it's not even his money, it is money paid for by tax payers.
        
        but tax does apply.
        
        So should the new tax then…
        
        Guybrush57 on 09/07/2025 - 18:50
        
        @jv:
        
        even though he will make more than 3 times as much
        
        Everyone with $3,000,000 in Super will make more than 3 times as much. Your point?
        
        it's not even his money
        
        How is his employment remuneration not his?
        
        jv on 09/07/2025 - 18:52
        
        -2
        
        @Guybrush57:
        
        Your point?
        
        Albo will make over $10,000,000 and is not paying additional taxes, unlike people who have saved up their own money, have much less super than him and now will have to pay more tax while he doesn't.
        
        What is your point?
        
        Guybrush57 on 09/07/2025 - 18:59
        
        -1
        
        @jv:
        
        over $10,000,000
        
        That's over 20 years. Doesn't feel like enough for the incredibly hard job he has.
        
        unlike people
        
        How many of these people are leading Australia?
        
        have much less super than him and now will have to pay more tax
        
        Nope. The additional tax is only for those with much more super
        
        jv on 09/07/2025 - 18:53
        
        -2
        
        @Guybrush57:
        
        How is his employment remuneration not his?
        
        The super is paid from the tax payer, it is not his own money.
        
        Guybrush57 on 09/07/2025 - 19:00
        
        -1
        
        @jv: Hmmm… if only there was a way we could make him work for that money… like say make him Prime Minister of Australia… which we did.
        
        jv on 09/07/2025 - 19:07
        
        -1
        
        @Guybrush57:
        
        if only there was a way we could make him work for that money…
        
        He already gets paid more than Donald Trump.
        
        He should contribute to his own super like the rest of us, not put out his hand for charity from tax payers…
        
        Guybrush57 on 09/07/2025 - 19:48
        
        -1
        
        @jv:
        
        He already gets paid more than Donald Trump
        
        False
        Trump gets paid USD$400,000.
        USD1.00 = AUD1.53
        USD$400,000 = AUD$612,000. Albo is not paid more than Trump. Albo is paid less.
        
        He should contribute to his own super like the rest of us, not put out his hand for charity from tax payers…
        
        So what are you doing to stop Sussan Ley from putting her hand out for taxpayer-funded charity and encourage her to contribute to her own super like the rest of us?
        
        jv on 09/07/2025 - 19:51
        
        -1
        
        @Guybrush57:
        
        USD$400,000 = AUD$612,000. Albo is not paid more than Trump. Albo is paid less.
        
        Albo is now on $622,000
        
        Guybrush57 on 09/07/2025 - 20:15
        
        @jv: A lot less than the $22,000,000 Liberals gave Gerry Harvey for free
        
        Protractor on 09/07/2025 - 19:53
        
        @jv: Why did your LNP mates not reform it?
        And don't tell us that they ever introduced legislation that was blocked.
        If this is any sort of a rort, it isn't ALP or Albo's rort. But the thing is it sin't a rort.Is it jv?
        It's a perk. Perks are not illegal, even when simpering moral crusaders want them to be.Even the deeply embedded crusaders who are dangerously fixated beyond a healthy,sustainable limit of obsession.
        Albo earns more than he is paid. It goes up 5% every time you post another anti Labor" cryertribe."
        Trump has made more in a single day of gaming the market,directly from the WH, than the entire ALP will make in decade or four.
        
        jv on 09/07/2025 - 19:55
        
        -1
        
        @Protractor:
        
        Why did your LNP mates not reform it?
        
        I don't have LNP mates.
        
        Why doesn't Albo reform it?
        
        Protractor on 09/07/2025 - 20:07
        
        -1
        
        @jv: Very Judas of you to deny your friends ,are your friends.
        Why didn't your LNP mates reform it in the last 30 years? Is it in that we don't believe in it basket?
        No one has milked more tax payer money than the Robodebt party.They even use spreadsheets to run the racket. The Nats have pissed billions up against the world of selfish indulgences. They always whinge about the city and inner city teals, but they take more of the taxes from the engine room of Australia than anyone else (per capita). ( a BIGGER perk than the Albo pay rise by a factor of thousands.)
        
        jv on 09/07/2025 - 20:08
        
        -1
        
        @Protractor:
        
        Very Judas of you to deny your friends
        
        Whatever floats your boat.
        
        I don't have any affliliation with LNP.
        
        Doesn't excuse Albo from exempting himself from the new tax…
        
        Guybrush57 on 09/07/2025 - 20:13
        
        @jv: Are you mad Sussan was exempted?
        
        Protractor on 09/07/2025 - 20:30
        
        @jv: There is no new tax. So are you lying?
        If you're not and there is the new tax as you claim
        
        Provide the number of the legislation as presented to the HoR. The day it was passed. Who voted which way.
        Because either Ted O'Brien is FoS or you are. You choose
        
        Ponsonby on 09/07/2025 - 20:50
        
        +2
        
        @jv: "exempting himself from additional taxes "
        No he isn't exempt. In common with all other members of the old Parliamentary Contributory Superannuation Scheme, his pension will be taxable and he will pay Div 293 and Div 296. And the concessional contributions cap is imposed too. And the Transfer Balance Cap if there is other super. And if he converts to a lump sum, lump sum tax rules will apply. These tax arrangements are the same as apply to other defined benefit schemes, other than for those for a few judges and state politicians.
        And like other members of this old scheme, he has to contribute (the rate is 11.5% for the first 18 years then 5.75%).
        Do facts matter? It's all in the link.
        https://www.finance.gov.au/sites/default/files/2024-12/PCAA-…
tyarrhea on 09/07/2025 - 10:56

+1

My 2 cents: -

Retail vs. Industry - industry super funds tend to be newer entities. The retail super funds would have a longer history of operation, offer legacy products and run on legacy systems which contributes to the higher cost base and higher fees.

Member count - this contributes to the cost to serve. Higher member counts will factor in revenue from flat admin fees charge, higher assets under management which means stronger fee negotiation with underlying investment mangers, this also translate into bargaining power in negotiating insurance and other add on services.

Annual returns - performance will be calculated daily to exclude any money you contribute on that day. When that money is investment the following day, performance for that additional money will start to accumulate so the annual return you see will exclude any money you contribute (but not exclude any money that is fully invested).

Legalities - Super funds are governed by the SIS Act and are monitored by ASIC and supervised by APRA. The high level of regulation contributes to the higher fees charged in Australia compared to overseas pension plans.
- jv on 09/07/2025 - 11:44
  
  -1
  
  My 2 cents
  
  Will get rounded down…
- mskeggs on 09/07/2025 - 12:32
  
  -2
  
  What do you think an industry fund is? And what do you think a retail fund is?
- Mintee on 09/07/2025 - 16:51
  
  -1
  
  Thanks -
  
  In terms of annual returns, is it fair to assume all funds calculate daily?
  
  Legalities - do you know of any protections; coincidentally, I didnt realize a super fund went under today. I would have thought this would have been something that the government protects?
atwilliams on 09/07/2025 - 11:22

+4

Lots of questions, but the answers are not necessarily straight forward.

Retail vs Industry: Retail generally owned and run "for profit" (by big banks etc). Industry are "not for profit" and originally started serving sectors of the trade union movement, but have now evolved such that many are open to anyone. Generally Industry funds have lower fees (but not always), but it's a trap to select super based on fees - It's risk and performance which matters and sometimes you have to pay for it!

It's also important to compare "apples with apples" and not just look at the title of a fund. For example, not all balanced funds have the same investment strategy / asset allocation.

Member count: More members = lower cost to serve = cheaper fees for you

Annual returns: Most funds will have an Unit or Crediting rate, which are typically calculated daily. The difference between the full year return and what you see on your statement is probably due to timing of contributions, contributions tax, admin fees and maybe insurance fees (if you have some paid out of your super). This is different if you hold "direct investments" in specific assets, but that's another story.

Financial advisors: Yes, many Financial advisers may charge a "assets under management" fee which is retrospective. All FA's need to disclose their fee structures up front. In my view this is a waste of money for super, unless you have specific needs / objectives.

Super recommendations: Not tailored to your personal needs; Generic typically based on life stage.

Legalities - As above, except for Self Managed Super Funds which are supervised by the ATO. (An SMSF is a custom super structure which is neither a retail or industry fund)
- bemybubble on 09/07/2025 - 11:28
  
  +3
  
  Member count: More members = lower cost to serve = cheaper fees for you
  
  Also more members = more funds = wider range of investments (generally speaking)
- Mintee on 09/07/2025 - 16:55
  
  So; help me out here, when looking at risk and performance. Theres the normal spiel of 'past performance is not a reliable indicator of future performance :P ) - So really; I need to also look deeper then 'brands' and rather the products within the brands?
  
  Are you aware of a site/resource that has all the super funds in Australia; their products and returns over x years? I've been trying to google, and it seems to be hard to find, rather, you have to read through each individuals websites.
  
  In terms of financial advisors - Im not referring to financial advisors so to say; maybe I am. Theres some company/people that can advise where to put your super but dont actually charge for advice. Am I missing something here?
  - atwilliams on 09/07/2025 - 17:39
    
    Super is a long term game. Unless you are financially literate and confident with executing an investment strategy, just pick a fund with stable long term results (over 5 to 10 years) and acceptable fees, then make steady contributions and watch your retirement nest egg grow with the benefit of time. Have a look at https://www.superguide.com.au/ for fund comparisons.
    
    Financial advice is a highly regulatory industry these days. Either you are licensed and can provide a "Statement of Advice" for a fee, or you are not. If you are not licensed, it's just "general advice", which means it doesn't take your personal circumstances into account. Typically super funds (in there purest form) do not provide financial advice, although larger retail funds may have a financial advisory arm which can. Personally I would steer clear of these.
    
    On the risk & performance piece - you need to consider how comfortable you are with your super balance going down?. Some people stress about this, so to feel comfortable, take a lower risk super option (typically a "conservative" option vs "balanced" or "high growth"). The downside though is that the "safer" the option, the lower the returns will be over time (as you are not investing as much in growth assets, which tend to be more volatile).
    
    Best of luck!
[Deactivated] on 09/07/2025 - 12:01

Not only Albo's fund but also get into the same funds as Crownless King Pele, Der Kaiser Franz Beckenbauer, Goalkeeper Die Katze Sepp Maier, Nadia Comaneci, President Kennedy, Brigitte Bardot, Dan A. and Jacinta Allan so you can get exempted from their new taxes, as well :)
Peter Ditto, forget about him, he is very busy with counting banknotes of his undisclosed trust fortune! Lol :)

P.s. Oh dear, just noticed now this is another Mintee post, my other fav fictional character is Aerith-Waifu!
Mintee, stick with Australian Super High Growth
https://www.australiansuper.com/investments/your-investment-…
- Mintee on 09/07/2025 - 16:57
  
  Why do you say go with Australian Super High Growth? - What happens at time of retirement. I was reading through this also; it says that they convert assets into "Cash" in lump sums, i cant remember if it was 20k or 50k; then pay your pension from this. When looking at retirement phase, why would you want a whole heap of cash, wouldnt you still want your money invested in something?
  - [Deactivated] on 09/07/2025 - 18:11
    
    +1
    
    Where did you read it? AFAIK, they cannot do that. It is up to you with which investment option you want to go. If you want for sure they can convert your assets into cash or whatever you want into. Actually, you do it online in your account whatever you want, cash, high growth, balanced etc. Best one is high growth for the long term.
    https://www.australiansuper.com/retirement/access-super
    - Mintee on 10/07/2025 - 08:17
      
      I think it might have been here: https://www.australiansuper.com/retirement/retirement-income… - But might have mis understood it?
  - soan papdi on 09/07/2025 - 18:33
    
    You're talking about those "life stages" plans that some funds have. They adjust your risk profile based on your age. Older you are, more cash and less high growth shares.
Drpepper666 on 09/07/2025 - 13:34

+4

Chatgpt slop
soan papdi on 09/07/2025 - 18:41

+2

Retail vs Industry Super Funds

The main difference between an industry super fund and a retail super fund is how their profits are managed. Retail super funds have a responsibility to shareholders, while industry funds don’t pay dividends or profits to shareholders.

Member Count - Why Does This Matter?

More members equals more funds which (in an ideal world) equals higher stability.

Annual Returns - How Are They Calculated?

Every Super fund has a several options (high growth, balanced, conservative, etc). You have to look at the returns of each of them depending on what you want to invest in. They normally release 1, 3, 5, 10 year growth rates.

Financial Advisors & Super Recommendations

Don't need an advisor. Just choose an industry fund and your risk profile.

Legalities

Go with a well regarded super provider, legalities are well out of scope for a forum post.
simplystu on 09/07/2025 - 21:01

-3

yet another quality Mintee thread … started without doing majority of the pre-req reading/searching yourself.
Gee thanks.
Lastchancetosee on 10/07/2025 - 08:30

The Barefoot Investor has a few basic guidelines which you might find helpful.
- Mintee on 10/07/2025 - 09:25
  
  Best book ever - I have read through this already :) My copy might have been old but doesnt cover the details
SlickMick on 10/07/2025 - 09:53

Retail vs Industry Super Funds

Yeah I hear that there are some ultra-cheap industry funds now. I setup a SMSF because retail fund fees are unreasonable, I particularly disliked paying them to lose my money.

Member Count - Why Does This Matter?

Divide fixed costs by # members. However, our SMSF fixed costs are < $1000pa, if an industry fund was as efficient as me, fees could be negligible.

Annual Returns - How Are They Calculated?

The only thing I'm confident of is that the figures will be dodgy. Just some examples: before tax, before fees. In any case, top performers one year never stay there for long.
I would only choose index-tracking options so the performance is out of their hands and I'm "guaranteed" the market rate. Then choice of fund is purely based on fees.

Financial Advisors & Super Recommendations

I didn't know people use financial advisers to choose a super fund. Unless all commissions are fixed across the industry, a commission would mean your adviser is not impartial. I certainly wouldn't pay a fee for someone to recommend a fund. I'd ask OZB, then research the top recommendations.

Legalities

AFAIK all super funds follow the same legislation. Thus my SMSF have to be audited, I need to do a heap of reporting as well as tax return.

Does a fund have to provide you with any consultation?

No. I'm sure when you open an account you'll agree to a heap of disclosures etc., but that's it.
- Mintee on 10/07/2025 - 16:54
  
  Youve kinda hit the nail on the head with the returns being dodgy. Im not saying my statement is dodgy. I just dont think their a true representation of returns. Im struggling to work out what my personal return is.
mrtin on 11/07/2025 - 20:42

Word of mouth is a good way to start your search for an adviser. Problem is if your connections mostly don't like advisers then they'll probably put you off finding one.

You need to look for a licensed adviser. You can search them up online. Google financial planner register.

Super is only one area they can help you in. Advisers generally look at the big picture, putting all the different financial areas together to help you meet your long term goals.

Adviser ratings website can be useful.

I'd personally avoid advisers who work for a product provider eg a super fund. It is unlikely they will recommend a fund outside of the one they work in.

If you get something that is free, then I'd walk away too. Nothing is free.

Advisers should generally charge a fee for service. A good adviser will have no link to a fund. They can recommend whoever and still get paid the same. Commissions in super have been banned since 2014.

Superannuation Structure in Australia

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