Industry vs retail super funds: what’s the difference?

What is an industry super fund?

Industry super funds were originally developed by trade unions and industry bodies to provide for their members in retirement. Originally, these super funds were only available to people working in a certain industry, such as health or education.

But today, many industry super funds are now open to the public, so anyone can join. These are known as ‘public offer funds’.

Some of the biggest industry super funds include:

• AustralianSuper
• Australian Retirement Trust
• Retail Employees Superannuation Trust (REST)
• Aware Super
• HESTA

Industry funds are not-for-profit funds, which means profits are effectively returned to their members by putting the money towards providing financial products and services.

According to the Australian Government’s Moneysmart website, industry super funds also typically range from low to medium cost, though this isn’t necessarily always the case.

Not-for-profit funds have, on average historically, outperformed retail funds, although bear in mind that past performance is not a reliable indicator of future performance. Any given industry or retail fund may perform well or poorly in future.

What is a retail super fund?

Retail super funds are typically run by banks, investment companies and other financial institutions. The company that owns the fund generally aims to keep some profit to be paid to the company’s shareholders. Membership is typically open to anyone.

Some companies offering large retail super funds include:

• AMP superannuation
• Colonial First State superannuation
• MLC superannuation
• OnePath superannuation

According to Moneysmart, retail super funds often offer a range of investment options. And while most retail funds range from medium to high cost, a low-cost alternative is also often available.

What is the difference between industry and retail super funds?

The main difference between an industry super fund and a retail super fund is what they do with their profits.

Industry super funds are not-for-profit and return any profits to their members, whereas retail super funds return their profits to shareholders.

According to the Australian Prudential Regulation Authority (APRA), industry funds hold more total superannuation assets than retail funds.

As of the March 2025 quarter, industry funds held approximately 33.06% of Australia’s $4.1 trillion total super assets, while retail funds held 19.3% of total assets. The remaining assets were held by small funds, including funds with less than 7 members (24.4%), public sector funds (18.0%) and corporate funds (0.9%).

In terms of performance, in the five years to March 31 2022, the money managed by retail funds grew by an average of 3.1% a year, compared to about 10.1% a year for the not-for-profit super fund segment, which includes not only industry funds but also public sector funds.

While fees can sometimes be higher for retail funds than for industry funds, as Moneysmart points out, most large industry and retail super funds also offer MySuper accounts. These are simple accounts that typically charge lower fees.

In more recent years, the performance gap between retail and industry super funds may have been shrinking, though industry super funds have generally remained ahead of their retail super counterparts.

When it comes to investments, retail super funds may offer a wider range of investment options compared to some industry funds. Both industry funds and retail funds typically offer some form of life insurance, but check with your fund to find out more about the level of cover on offer.

What other types of super funds are there?

As well as industry and retail super funds, other types of super funds include:

• Corporate super funds: Funds created by a company for their employees.
• Public sector super funds: Funds created for federal or state government employees.
• Self-managed super funds (SMSFs): private super funds that are managed by individuals. They can have up to four members.

Choosing a super fund

When comparing super funds, whether it is an industry fund or retail fund, it’s important to carefully consider factors such as:

• Investment performance: Consider a fund’s long-term track record or performance and whether it has a history of delivering high returns. Remember that past performance should not be relied on to judge future performance.
• Fees: Compare the super fees you will be charged against other funds and make sure you aren’t paying more than you should be.
• Investment options: Look for a fund that offers investment options suited to your circumstances and the level of risk you are willing to take on.
• Insurance: If you would like to take out life insurance through your super, consider what cover the fund offers and check the premiums charged.

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