Canstar News - March 11th
Superannuation can play an extremely important role in securing a financially stable future. And with reports from the Productivity Commission and Kenneth Hayne’s banking royal commission – both released in early 2019 – shining a light…– Read more
Canstar News - March 25th
There are a few ways in which you can potentially access your super early, and coronavirus hardship is one of them. Here's how it works.– Read more
Canstar News - March 22nd
The Reserve Bank of Australia’s (RBA) latest rate cut (on 19 March, 2020) was the nation’s first out-of-cycle reduction since 1997, leaving the official cash rate at an all-time low of 0.25%. The move comes just…– Read more
Canstar News - March 18th
The sharp falls on global financial markets over recent weeks – the biggest declines we’ve seen since the Global Financial Crisis more than a decade ago – have many investors understandably very concerned. Fuelled by…– Read more
Canstar News - March 16th
Gatherings of more than 500 people are banned from today in Australia as a growing number of companies opt to close offices or enforce remote work. The ramifications for businesses and trade are already starting to…– Read more
Canstar compares superannuation using a unique star ratings methodology that compares both cost and features across superannuation products. Canstar star ratings represent a shortlist of products, enabling consumers to easily compare super funds and narrow their search to products that have been assessed and ranked.
Use the selector tool at the top of this page to compare super funds using our star ratings. Find out what to look for in a super fund here. We have also compiled a list of non rated Super funds for you to compare. View non rated Super funds.
Superannuation is the portion of your earnings and savings that is placed in a fund to be held in trust until your retirement. The objective of superannuation is to provide income in retirement that substitutes or supplements the Australian Age Pension.
The money that is held for you within a superannuation fund is invested in a range of assets (that you can choose). The income earned by your superannuation investments are taxed concessionally.
Given that superannuation will represent the bulk of retirement savings for many Australians in the future, choosing a superannuation fund should be a well-researched strategic decision. Read more about what superannuation is here, what the different types of super funds are and what different super investment options mean.
Written by: TJ Ryan
Please note that these are a general explanation of the meaning of terms used in relation to superannuation funds and related investment activities.
Policy wording may use different terms and you should read the terms and conditions of the relevant policy to understand the inclusions and exclusions of that policy. You cannot rely on these terms to the part of any policy you may purchase.
Refer to the product disclosure statement and Canstar’s FSCG.
What is an Account-based income stream/account-based pension?
Account-based income stream/account-based pension is a pension paid (generally on retirement) from superannuation benefits standing to the credit of your account. For most people aged 60 and over, these pension payments have been tax-free since July 2007. Previously, they were known as allocated pensions.
What is a Benchmark?
A Benchmark usually represents the minimum performance objective for an investment portfolio.
What is Concessional contributions?
Concessional contributions are superannuation contributions made from before-tax income for which a tax deduction can be claimed. They are also referred to as deductible contributions. Concessional contributions include employer Superannuation Guarantee (SG) contributions, additional employer contributions (salary sacrifice) and contributions made by the self-employed for which they claim a tax deduction.
What is a Contribution cap?
A Contribution cap is the limit on the amount of contributions that can be made for an individual. Contributions in excess of the cap will be subject to excess contributions tax. Concessional and non-concessional contributions have different cap amounts.
What is a Dividend?
A Dividend is the amount a company pays out to its shareholders from its after-tax earnings. For individual shareholders, the payout is in proportion to the number of shares held. When company profits are down, the company may decide to pay a reduced dividend, or no dividend at all.
What is the Excess concessional contributions tax?
Excess concessional contributions tax is a tax of 31.5% on your super contributions over the concessional contributions cap.
What is an Investment fee?
An Investment fee is how much you must pay your investment manager, or the MER %. This typically depends on the investment option you choose.
What is a Management fee?
A Management fee is how much it costs to pay the fund for managing your super balance, this is usually tiered by balance level.
What is Management expense ratio (MER %)
Management expense ratio (MER %) is what proportion of your investments you must pay your investment manager. For example: In an equity fund where the historical gross return might be 10%, a 1% expense ratio will consume approximately 10% of the investor’s return. In a bond fund where the historical gross return might be 8%, a 1% expense ratio will consume approximately 12.5% of the investor’s return. In a money market fund where the historical gross return might be 5%, a 1% expense ratio will consume approximately 20% of the investor’ historical total return.
What are Non-concessional contributions?
Non-concessional contributions are contributions made from a person’s after-tax income. The terms ‘non-concessional contributions’, ‘post-tax contributions; and after-tax- contribution’ are often used interchangeably.
What is a PDS?
A PDS is a Product disclosure statement.
What is a Performance fee?
A Performance fee is how much you have to pay your investment manager for exceeding benchmarked performance.
What is the Preservation age?
The Preservation age is the minimum age at which members can access their superannuation benefits, provided you have permanently retired from the workforce.
What is Salary sacrifice?
Salary sacrifice is an agreed arrangement between an employer and an employee whereby the employee agrees to sacrifice a part of their gross salary in exchange for a benefit, such as extra employer contributions to superannuation. An annual contribution limit applies.
What is Superannuation Guarantee (SG)?
Superannuation Guarantee (SG) is employer contributions to your super. Currently the minimum level of SG contributions is the equivalent of 9% of ordinary time earnings. This money is not taken out of your wage or salary; it is paid in addition to your wage or salary. An annual contribution limit applies.
What is Transition to retirement?
Transition to retirement is an income stream that you can use before you are 65 years old, in order to transition into retirement by working fewer hours and supplementing your salary with income from your super.
What is a Withdrawal fee
A Withdrawal fee is a fee that a fund may charge when you make a full or partial withdrawal.
There are more than 350 super funds in the market that are classified as personal super, corporate super, SMSF products, public sector super, wrap/platform accounts, industry funds, retail funds, master trusts, etc. Many of these funds are not available directly to the average person. The customer may be required to be employed by a particular government department or large corporation, or it may be necessary to see a financial planner first.
We have therefore limited our superannuation star ratings to funds that are available to the average person, where anyone can apply directly to the fund.
We have focused on the accumulation stage, when funds are being contributed to superannuation, not the drawdown stage following retirement. We have not credit rated the super fund managers.
Below are some of our popular superannuation providers we rate or view more here: