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Types of Superannuation Funds

Before paying for your superannuation, it is advisable to know the different types of superannuation funds. Knowing the types of superannuation funds will allow you to discover where you can invest your money and claim the most benefits. Similarly, knowing the types of superannuation funds will enable you to understand the manner by which these funds operate.

Types of Superannuation Funds

The first in the types of superannuation funds is called "do-it-yourself funds." Do-it-yourself funds are also called SMSF or self-managed superannuation funds, and only a few retirees may benefit from the fund contributions. Often, only a maximum of four or five benefit from do-it-yourself funds.

Second, employer stand-alone funds are types superannuation funds wherein company owners manage the fund on behalf of their employees. The conditions in employer stand-alone funds vary from one employer to another.

Another type of superannuation funds is the industry super funds. In industry funds, there are groups or associations of business owners who manage the funds. Shareholders are absent in this type of fund, so only members benefit in the end.

Fourth in the types of superannuation funds is public sector employees funds. Here, only government employees are covered by the contributions. It is also the government that runs this superannuation fund.

Finally, master trusts funds are types of superannuation funds that feature two variations - retail master trusts or wholesale master trusts. Retail master trusts may also be called wrap platforms. Both retail and wholesale master trusts may be managed by banks.

Advantages in Choosing Your Superannuation Funds

One advantage is that you can contribute to the superannuation fund that offers minimal costs but provides great benefits. Usually, the types of superannuation funds that have this characteristic are those with a large number of members.

Another advantage is that you can minimise payment for financial advisers, planners, insurance companies and agents. Again, those superannuation funds with a lot of members have this characteristic.