What is a default super fund?

M Isolation photo/Shutterstock.com

Knowing the ins and outs of how default super funds work could be important when it comes to maximising your retirement nest egg, or rebuilding it if you have recently withdrawn funds.

Key points:

If you don’t have a preferred fund or choose not to nominate one, an account will be created on your behalf with your employer’s chosen default super fund
Every employer is obliged to make super guarantee payments – or contributions – on behalf of eligible employees
If your super is currently held with a default fund, you can apply to have your super transferred to a fund of your choice.

Whenever you start a job, your new employer will usually give you a superannuation fund nomination form to fill out. This form allows you to nominate which fund your employer should pay your super contributions into.

You might nominate a super fund you have already been contributing into. Or if it’s your first job, or you want to choose a new fund for yourself, you may decide to do some research, compare funds and decide on a specific fund you want your super contributions from your new employer paid into.

But if you either don’t have a preferred fund or simply choose not to nominate one, an account will be created on your behalf with your employer’s chosen default super fund.

Compare Super Funds

Aware Super | High Growth (Lifecycle investment)

More details

PROMOTED

Canstar 2022, 2023 & 2024 Outstanding Value Super Award
Award Winning App Helps You Stay In Control
Super Returns, Super Advice, Super Helpful

AustralianSuper | Balanced (Accumulation)

More details

PROMOTED

Australia’s largest fund, join easily online
Canstar Outstanding Value for superannuation
Read PDS & TMD at australiansuper.com

Australian Ethical | Balanced (accumulation)

More details

PROMOTED

Australian Ethical Balanced (accumulation) Option
Invest With Heart. Choose Australian Ethical Super
Read the PDS & TMD on our website. AFSL 526 055

Canstar may earn a fee for referrals from its website tables and from Promotion or Sponsorship of certain products. Fees payable by product providers for referrals and Sponsorship or Promotion may vary between providers, website position, and revenue model. Sponsorship or Promotion fees may be higher than referral fees.

On our ratings results, comparison tables and some other advertising, we may provide links to third party websites. The primary purpose of these links is to help consumers continue their journey from the ‘research phase’ to the ‘purchasing’ phase. If customers purchase a product after clicking a certain link, Canstar may be paid a commission or fee by the referral partner. Where products are displayed in a comparison table, the display order is not influenced by commercial arrangements and the display sort order is disclosed at the top of the table.

Sponsored or Promoted products are clearly disclosed as such on the website page. They may appear in a number of areas of the website, such as in comparison tables, on hub pages, and in articles. The table position of the Sponsored or Promoted product does not indicate any ranking or rating by Canstar.

What is a default super fund?

A default super fund, also known as an employer-nominated fund, is the superannuation fund into which your employer will make your super contributions if you do not nominate a fund of your own choosing.

According to the Australian Taxation Office (ATO) rules, every employer is obliged to make super guarantee payments – or contributions – on behalf of eligible employees, and the default fund (also called a MySuper product) is where those payments will go unless an employee has nominated a super fund.

According to the Australian Government’s Moneysmart website, default super funds are intended to be simple, low-fee options, where an individual’s super is usually put to work in either a ‘single diversified’ or ‘lifecycle’ investment option.

An employer can select any industry or retail super fund as their default fund, but their fund of choice must offer a MySuper account.

The upshot of all this is that, for employees who do not take an active interest in their super, the MySuper system is designed to help make sure that the employer’s default fund will be an appropriate place for their retirement savings.

But there can be a significant difference in the performance of these funds, so it can be worth doing your research before joining one. The ATO offers a YourSuper comparison tool which:

displays a table of MySuper products ranked by fees and net returns (updated quarterly)
allows you to select and compare in more detail up to 4 MySuper products at a time
links you to a super fund’s website when you select a MySuper product from the table
can show your current super accounts alongside other MySuper products, if you access the personalised version through myGov
provides links to help you consolidate your super accounts.

The information displayed in the comparison tool is collated and supplied by the Australian Prudential Regulation Authority (APRA).

Canstar’s experts rate the super funds on its database based on a range of factors to help consumers find a product that suits them.

Can I transfer my super to a different fund?

If your super is currently held with a default fund, you can apply to switch and have your super transferred to a fund of your choice.

According to Moneysmart you can do this easily online through the ATO:

go to my.gov.au
log in or create an account
link your myGov account to the ATO
select ‘Super’ and then ‘Manage’
select ‘Transfer super’ (this option will only appear if you have more than one super account).

You can ask your new super fund to consolidate the funds for you, or you can lodge a paper form with the fund you wish to transfer your super from – this rollover initiation request is to transfer the whole balance of superannuation benefits between funds.

But remember, it’s important to weigh up the pros and cons of transferring your super to a new account.

When looking for the right fund for your retirement savings, there are a lot of factors to consider, including the fees charged, the insurance on offer through the fund and the education and advice that’s available to members.

The investment performance of the fund is also important to think about, but because investments can go up and down over time, a fund’s performance in the past shouldn’t be relied on as an indication of its likely future performance.

If you want to see if there’s a super fund that may be suited to your needs, you can compare your options with Canstar.

Compare Superannuation with Canstar

The table below displays some of the superannuation funds currently available on Canstar’s database for Australians aged 30 to 39 with a super balance of up to $55,000. The results shown are sorted by Star Rating (highest to lowest) and then by 5 year return (highest to lowest). Performance figures shown reflect net investment performance, i.e. net of investment tax, investment management fees and the applicable administration fees based on an account balance of $50,000. To learn more about performance information, click here. Consider the Target Market Determination (TMD) before making a purchase decision. Contact the product issuer directly for a copy of the TMD. Use Canstar’s superannuation comparison selector to view a wider range of super funds. Canstar may earn a fee for referrals.

Aware Super | High Growth (Lifecycle investment)

More details

Active Super | Lifestage - Accelerator

Link Not Supplied

Hostplus Super | Personal - Balanced

Link Not Supplied

AustralianSuper | Balanced (Accumulation)

More details

UniSuper | Personal Account - Balanced (MySuper)

Link Not Supplied

Performance, fee and other information displayed in the table has been updated from time to time since the rating date and may not reflect the products as rated.
The performance and fee information shown in the table is for the investment option used by Canstar in rating of the superannuation product.
Performance information shown is for the historical periods up to 31/01/2024 and investment options noted in the table information.
Performance figures shown reflect net investment performance, i.e. net of investment tax, investment management fees and the applicable administration fees based on an account balance of $50,000. To learn more about performance information, click here.
Performance data may not be available for some products. This is indicated in the tables by a note referring the user to the product provider, or by no performance information being shown.
Please note that all information about performance returns is historical. Past performance should not be relied upon as an indicator of future performance; unit prices and the value of your investment may fall as well as rise.
Any advice on this page is general and has not taken into account your objectives, financial situation or needs. Consider whether this general financial advice is right for your personal circumstances. You may need financial advice from a qualified adviser. Canstar is not providing a recommendation for your individual circumstances. See our Detailed Disclosure.
Not all superannuation funds in the market are listed, and the list above may not include all features relevant to you. Canstar is not providing a recommendation for your individual circumstances.
Canstar may earn a fee for referrals from its website tables, and from Sponsorship or Promotion of certain products. Fees payable by product providers for referrals and Sponsorship or Promotion may vary between providers, website position, and revenue model. Sponsorship or Promotion fees may be higher than referral fees. Sponsored or Promotion products are clearly disclosed as such on website pages. They may appear in a number of areas of the website such as in comparison tables, on hub pages and in articles. Sponsored or Promotion products may be displayed in a fixed position in a table, regardless of the product’s rating, price or other attributes. The table position of a Sponsored or Promoted product does not indicate any ranking or rating by Canstar. For more information please see How We Get Paid.
Click here for additional important notes and liability disclaimer.

Performance and Investment Allocation Differences

Fee, performance and asset allocation information shown in the table above have been determined according to the investment profile in the Canstar Superannuation Star Ratings methodology.
Some providers use different age groups for their investment profiles which may result in you being offered or being eligible for a different product to what is displayed in the table. See here for more details.
Australian Retirement Trust Super Savings’ allocation of funds for investors aged 55-99 differ from Canstar’s methodology – see details here.
The Australian Retirement Trust Super Savings (formerly Sunsuper for Life) product may appear in the table multiple times. While you will not be offered any single investment option, this is to take into account the different combinations of investment options Australian Retirement Trust may apply to your account based on your age. For more detail in relation to the Australian Retirement Trust (formerly SunSuper for Life) product please refer to the PDS issued by Australian Retirement Trust for this product.
Investment profiles applied initially may change over time in line with an investor’s age. See the provider’s Product Disclosure Statement and TMD and in particular applicable age groups for more information about how providers determine their investment profiles.

Original article by James Hurwood.

Main image: M Isolation photo/Shutterstock.com

Thanks for visiting Canstar, Australia’s biggest financial comparison site*

This article was reviewed by our Editor-in-Chief Nina Rinella before it was updated, as part of our fact-checking process.

Ann Lund

Content Editor

Ann is an award-winning journalist with more than three decades of experience. Now working as a freelancer, she has worked as a reporter, presenter and producer for the BBC, a producer for the ABC, and for many years was a journalism lecturer at the Queensland University of Technology. Ann has received many awards including Most Outstanding Contribution to Journalism in the Queensland Media Awards (Clarion Awards 2021), a Vice Chancellor’s Award for Excellence and A Dean’s Award for Excellence in Teaching. Connect with her on LinkedIn.

In this article