Our Pick Of The Best Default Superannuation Funds In 2024

Superannuation is vital for all Australian employees, as it is the key to setting up your life for retirement. To do so, you need to have a good superannuation fund: one that not only offers you high returns, but also supports you throughout your retirement planning.

In 2018, The Productivity Commission released a report, Superannuation: Assessing Efficiency and Competitiveness which found that: “While some funds consistently achieve high net returns, a significant number of products underperform, even after adjusting for differences in investment strategy. Under-performers span both default and choice, and most (but not all) affected members are in retail funds.”

We used a rigorous methodology to compare superfunds in Australia for consumers, so that you could take the guesswork out of it. Our methodology included comparing 19 of the most populated MySuper products from superannuation funds across the nation.

Forbes Advisor then compared a dataset of eight different data points, being:

• Whether the super fund was an industry or retail fund;
• The average rating of the super fund, sourced from Australia’s consumer opinion site Product Review;
• Each fund’s MySuper performance over the past year until June 30, 2024;
• Each fund’s MySuper performance over the past decade until June 30, 2024;
• Annual administration fees along with any exclusions or inclusions within said fee;
• ESG credentials;
• Member services; and
• Any additional add-ons the fund provides its members.

This data was predominately sourced via the ATO website, which compares all MySuper products in Australia for ease of consumers.

Alongside this data set, Forbes Advisor conducted additional research via company websites and communications to establish the best-of ranking. Of the 19 different MySuper products compared, nine were then shortlisted as the best performing across the dataset.

Those nine all received three or more stars out of five from Forbes Advisor, and make up the best-of ranking as seen above.

About Star Rankings
You will note that we have included a star rating next to each product or provider. This rating was determined by the editorial team once all of the data points above were considered, and the pros and cons of each product attribute was reviewed. The star rating is solely the view of Forbes Advisor editorial staff. Commercial partners or advertisers have no bearing on the star rating or their inclusion on this list. Star ratings are only one factor to be considered, and Forbes Advisor encourages you to seek independent advice from an authorised financial adviser in relation to your own financial circumstances and investments before you decide to choose a particular financial product or service.

MySuper came about thanks to a legislation change in 2012, allowing default superannuation products by superannuation providers to fall under the one category of ‘MySuper’ products.

It was first introduced as part of the federal government’s 2011 ‘Stronger Super’ reforms, where the then-Gillard Labor government intended to provide a simple, cost-effective, balanced product for the vast majority of Australian workers invested in the default option of their current fund.

Since January 1, 2014, employers have been required to pay all compulsory contributions into approved MySuper accounts for their employees–unless an employee has chosen another investment option. Superannuation funds then had until July 1, 2017 to move existing default members into a complying MySuper product, with many funds choosing to convert their existing default product into a MySuper offering.

As MySuper exists to provide Australians with an easily comparable product, an annual performance test is conducted by super industry watchdog APRA, which includes publishing fee tables and other performance-related statistics.

As ASIC’s Moneysmart website explains, if you have a MySuper product, your super fund is obliged to let you know if it has performed badly following the APRA test.

When comparing superannuation funds, it is worth considering what type of fund the superannuation provider offers, as there are a number of different types. The most common are industry and retail funds.

Industry Funds

Industry superannuation funds are profit-for-member funds, meaning profits go to members and not shareholders. Industry super funds often have lower fees, according to the Productivity Commission’s Inquiry into Superannuation, have generated higher net returns than retail funds.

While industry funds initially began to serve specific industries–such as the hospital sector or tertiary education workers–many have since opened their memberships to all Australians.

Retail Funds

Conversely, retail super funds are usually owned and run by financial institutions, such as banks–meaning they can outsource some components of the fund to service providers that they own, which run at a profit.

While fees charged by retail funds have fallen over the years, they still remain higher than those charged by industry funds, according to the Productivity Commission’s report.

Public-sector Funds

Public sector funds are superannuation funds run for government employees, and are usually restricted to people working in the public sector–occasionally also including their spouses or families.

Corporate Funds

Some larger companies and employers have their own superannuation fund they run for employees. Some companies appoint their own board of trustees and run and manage the fund themselves, while others will outsource the running of the fund to another superannuation fund.

Self-Managed Superannuation Funds (SMSFs)

You may decide to manage your super yourself within a self-managed super fund. To do so you generally need to become a trustee and adhere to the same superannuation rules and regulations as a large superannuation fund.

While SMSFs provide you with more autonomy over investment choices, they are time consuming and most effective at balances of over $200,000.

Related: Can I have a SMSF and industry fund?

Often members change super funds after low returns or when APRA notifies them of a period of poor performance. But underperformance isn’t the only factor affecting the decision to switch. People may decide to switch funds for myriad reasons, including finding a more ethical fund, a fund that allows for salary sacrificing, a fund with better customer service, or even one with lower fees.

This is why it is important to regularly review your super fund and product choice to make sure you are putting yourself in the best position for your retirement.

Kirby Rappell, executive director of SuperRatings, notes that despite the recent uncertainty, returns have remained positive over the past one to 20 years for many MySuper products.

“Superfunds continue to display strong capabilities in navigating uncertain market environments and members have been experiencing increased levels of ups and downs for some time now,” Rappell said in a statement.

“Our message to members remains one of focusing on the long term and sticking with their long-term investment strategy. The ups and downs are likely to continue, and members who are thinking about changing their strategy are encouraged to contact their fund, or speak with a trusted adviser, before making any changes.”

Data research by Mia Dunn.