Australian Super Review – What You Need To Know

Australian Super is Australia’s biggest superannuation fund. Here’s my Australian Super review to help you decide if Australian Super is the right partner for you in saving for your retirement.

Verdict: Australian Super has won awards, and is an industry fund benefiting members but there may be better funds out there with lower fees.

Introduction

Australian Super¹ fund offers a number of investment options to working Australians. Australian Super provides products and advice when it comes to superannuation and insurance. Australian Super is Australia’s biggest super fund.

Choosing the right super fund to partner with during your working life is important. While many keep an eye on annual super performance, high super and insurance fees can have a significant impact on your retirement nest egg. You can listen to my Superannuation podcast with Vince Scully HERE.

CaptainFI is not a Financial Advisor and the information below is factual review information, not financial advice. This website is reader-supported, which means we may be paid by advertising on the site, or when you visit links to partner or featured sites. For more information please read my Privacy Policy, Terms of Use, and Financial Disclaimer.

What kind of super fund is Australian Super?

Australian Super¹ is a superannuation fund based in Australia. Australian Super is a public offer, industry super fund run for the benefit of its members. You don’t have to be working in a particular industry to join. 10 percent of Australian workers have their super with Australian Super. It’s Australia’s largest super fund and manages over $270 billion in assets around the world.

Australian Super is not only a super fund. It also offers the Choice Income account-based pension, retirement planning and insurance products.

You can read more about the different types of Super funds here on Money Smart: Types of super funds – Moneysmart.gov.au²

Is Australian Super actually an Australian company?

Australian Super is an Australian company. It was established in 2006 when the Superannuation Trust of Australia and Australian Retirement Funds merged. Australian Super is the biggest superannuation fund in Australia, with 1 in 10 Australian workers a member.

Who owns Australian Super?

Australian Super is a superannuation fund owned by the Australian Industry Group (AI Group) and the Australian Council of Trade Unions (ACTU). The ACTU owns Australian Super through a company called ACTU Super Shareholding.

What are the super options through Australian Super?

Australian Super has a number of super investment options³ to choose from, which include:

·        MySuper – default investment option

·        Pre-mixed – a low hands-on option for those who want to select their level of risk and leave it to the fund managers

·        DIY Mix – a medium hands-on option for those who want input into their investments

·        Member Direct – the option with the greatest control

Within Pre-mixed options, members can choose an investment mix to match their investment goals and risk profile, including:

·        Balanced – a wide selection of assets including cash, shares and property

·        Index diversified – aiming for medium to long-term growth

·        Conservative balanced – more exposure to cash and fixed interest

·        High growth – aims for long-term growth

·        Stable – focus on stability in cash and interest, rather than growth

·        Socially aware – long-term growth with a social and environmental focus

“Our strategy sets out how we plan to assist all members achieve and balance three important objectives: maximise your retirement income, provide flexible access to funds in retirement and manage expected risks.”

australiansuper.com/about-us¹

What are Australian Super’s fees?

As with other super funds, Australian Super charges a number of fees⁴:

·        Administration fees – a flat fee of $1 per week, and asset-based admin fee of 0.10% of the account balance, capped at $350 per year.

·        Investment fees and costs – 0.06% to 0.52% each year for Pre-mixed and DIY Mixed options. Member Direct fees are $30-$180 each year depending on what option you choose.

·        Transaction costs – 0.00%-0.20% each year for PreMixed and DIY Mixed options

·        Brokerage fees – $13 for trade amounts of $0-$13 000, 0.10% for trades above $13 001. This is only for the Member Direct investment option when trading shares, LICs and ETFs.

·        Advice fee – most of the phone advice is covered by the admin fee. $295 is charged to your account for advice on the transition to retirement and commencing a retirement fund. Other personal finance advice fees depend on the advice and is agreed in writing by your advisor.

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So, for the MySuper Balanced Fund with a balance of $50 000, you would be charged about $447, deducted from your fund. This is made up of $52 admin costs (irrespective of the balance), plus $50 asset-based admin fee (0.01% of $50 000), plus $245 for investment fees and costs, and $100 in transaction costs.

Compared to BFIs low fee Hostplus Indexed Balanced fund, Australian Super seems on par with performance, plus is a bit cheaper on fees.

Performance of Australian Super

Discussing a super fund’s performance can be a challenge because there are so many variables. The following will look at Australian Super’s MySuper option over 1yr and 10yrs.

The performance benchmark for many super funds is to generate a return equivalent to the Consumer Price Index (CPI) plus 3%. If the CPI was 3%, then the target return would be an average of 6% over the past 10 years.

Overall, it seems Australian Super has been performing well. Australian Super’s MySuper has averaged a 9.14% return over the past 10 years. However, the past year has seen a -2.97% drop, which no doubt is a reflection of the challenging post-COVID financial climate.

Just remember too, past performance is not necessarily an indicator of future performance.

For more info on investment returns, you can read this article here on Equip Super: What’s a good investment return? | Equipsuper⁵

Australian Super insurance policies

Australian Super offers a number of insurance policies and premiums are deducted from your super contributions. Paying through super can be a tax effective way of paying for insurance. However, high insurance premiums can impact your super balance, eating into your retirement savings.

Insurance premiums increase with age, amount of cover, and can change with the line of work you’re in. The following figures are for a male aged 30 with Income Protection Insurance for $100,000 gross earnings per year in a white-collar management job with a uni qualification. In March 2023 the insurance rates changed, so premiums are from March 2023. The example is also for $500,000 Death Cover, and $500,000 Total and Permanent Disability (TPD).

Australian Super insurance policies include:

·        Death – including Terminal Illness: Premium example – 30yr male, $500 000 cover = approx. $115 per year

·        TPD – Premium example – 30yr male, $500 000 cover = approx. $100 per year

·        Income Protection cover – paid monthly if you can’t work temporarily, typically up to 75% of monthly income. Premium example –- 2mth wait/2yrs duration = $77 per year. 2mth wait/5yr duration = approx. $330 per year.

To be eligible for insurance you need to meet the eligibility criteria. This includes being in an insurable line of work, of insurable age, and being an Australian resident. If you are out of work for a period, your insurance may be canceled. Keep in mind, you may be able to self-insure if you reach a point in your FIRE journey where you generate enough passive income to cover some of your expenses, and don’t need insurance anymore.

You can use the Australian Super insurance calculator HERE: AustralianSuper (tal.com.au)⁶

How does Australian Super invest my super?

How Australian Super invests your super³ depends on what super option you’re invested in.

The PreMixed Balanced investment option has the following asset classes and allocations:

·        10-45% – Australian and international shares

·        0-10% – listed infrastructure and listed property

·        0-15% – private equity

·        0-20% – credit and cash

·        0-25% – fixed interest

·        0-30% – unlisted infrastructure and unlisted property

·        0-5% – other assets

The asset class ranges and allocations change depending on the investment option you select. In comparison, the high growth fund range for Australian and international shares is 20-50%. Follow the link to check out the different breakdowns.

Does Captain Fi have super through Australian Super?

No, I currently have my super in Hostplus. You can read my review of Hostplus Super HERE.

Advantages of Australian Super

• Australian Super is an award-winning fund
• Australian Super is Australian owned
• Australian Super has a number of options to choose from
• Australian Super has a track record of low super and insurance fees
• Australian Super has a history of good returns
• Australian Super offers a number of options to match your investment risk profile
• Australian Super offer a diversified spread of investments within their fund options
• Australian Super is an industry fund and their profits benefit members
• Tools and calculators available on their website for insurance calculations and retirement planning
• Website has heaps of articles on investing, insurances and super

“AustralianSuper is a profit-for-member fund. This means we don’t pay profits or dividends to shareholders, so profit we make is for members.”

australiansuper.com/about-us¹

Disadvantages of Australian Super

• Australian Super has some negative online reviews
• Australian Super has a 1.4/5 star rating on Product Review⁷
• Some customers feel Australian Super could improve on communication and customer service
• Some feedback suggests insurance is not always paid out in a timely manner

FAQs about Australian Super:

When was Australian Super founded?

Australian Super was founded in 2006 with the merger of the Superannuation Trust of Australia and Australian Retirement Fund. Australian Super is Australia’s biggest superannuation fund.

How many members are there?

Australian Super has almost 2.9 million members, which is about 10 percent of the Australian workforce.

You can read more about Australian Super stats as well as info on other Super funds on Super Guide HERE: Super Guide: AustralianSuper guide: Performance, fees, USI, ABN, address, contact details⁸.

Can I easily transfer my super to Australian Super?

You can easily transfer your current super balance from your super account into the Australian Super fund by filling out a transfer form. In terms of insurance, consider if the new fund will insure you for any existing conditions. Also, weigh-up the impact it may have on your insurance premiums. Always do your own research before you switch super funds.

Is Australian Super one of the best funds in Australia?

Australian Super is a competitive candidate when saving for retirement. It compares with the BFI holy grail of low fees and decent returns. It’s also been voted Australia’s most trusted super fund for the past 10yrs, and rates consistently in the top 2 performers over the past 7, 10 and 20 years.

As to be expected from a large company, there are some negative reviews online, many to do with insurance. But in terms of low super fees, low insurance fees, plus a track record of decent returns, Australian Super is worth considering as your partner in saving for retirement.

For more reading on Superannuation in Australia, check out my article HERE.

Conclusion

Australian Super is Australia’s biggest super fund. Australian Super provides products in the super and insurance space. It’s an award-winning fund, with 10% of the Australian working population entrusting it to build their retirement nest egg.

Australian Super has an established track record of low super fees, low insurance fees and decent returns. The effect of these on your retirement nest egg shouldn’t be underestimated. In these areas, Australian Super offers a competitive fund compared to BFI’s recommended Hostplus Index Balanced option.

Partnering with the right super fund can set you up for retirement and is worth getting right from the start of your working life. Paying attention to your super from the start is a good way to ensure your retirement savings are in good shape when it comes time to quit work.

You can also check out my review of MLC Super HERE or my review of ANZ Smart Choice Super.

Reference List:

1. https://www.australiansuper.com/
2. ‘Types of super funds’, MoneySmart.gov.au. Accessed online at https://moneysmart.gov.au/how-super-works/types-of-super-funds on April 20, 2023.
3. Your PreMixed investment options, Australian Super. Accessed online at https://www.australiansuper.com/investments/your-investment-options/pre-mixed-investment-choice on April 20, 2023.
4. Superannuation fees & costs, Australian Super. Accessed online at https://www.australiansuper.com/compare-us/fees-and-costs on April 20, 2023.
5. What’s a good investment return?, Equip Super. Published: Jan 19, 2022. Accessed online at https://www.equipsuper.com.au/blog/what-s-a-good-investment-return on April 20, 2023.
6. Let’s get started on your insurance costs (calculator) – Australian Super. Accessed online at https://insurancecalculators.tal.com.au/australiansuper on April 20, 2023.
7. ‘AustralianSuper’, ProductReview.com.au. Accessed online at https://www.productreview.com.au/listings/australiansuper on April 20, 2023.
8. ‘AustralianSuper’, SuperGuide.com.au. Accessed online at https://www.superguide.com.au/super-funds-guide/australiansuper#:~:text=the%20year%20awards.-,AustralianSuper%20member%20profile,funds%20in%20terms%20of%20growth on April 20, 2023.