Choosing a super fund is no easy feat. With over 100 super funds in Australia to choose from, we’re spoilt for choice. As lucky as we are to have many options, we can often suffer decision fatigue and confusion about where to begin.

The best place to start is by knowing the key factors to consider when choosing a super fund. Having criteria against which you can compare different super funds is like a compass, helping you stay the course.

You’ll find some ideas to help you build your own list of criteria here in this article.

First, let’s recap on the purpose of super funds and the role of super in shaping your financial future.

Purpose of super funds

The main purpose of super funds is to house your retirement savings, helping you prepare to retire comfortably. Understanding this purpose gives you perspective when considering which super fund to choose. It’s less about what’s trending now and more about longevity, looking to the future.

Your super is generally built up throughout your working life. So, it’s wise to choose a super fund you’re happy to stick with over the long term. Of course, that doesn’t mean you can’t change funds if and when your circumstances or preferences change later.

Choosing a super fund

As covered in our article on comparing super providers, there are several key factors to consider when choosing a super fund:

· Super fund performance

· Investment options

· Fees and costs

· Insurance in super

· Additional services

· Governance

· Personal needs and goals

Let’s look at each of these factors more closely.

Super fund performance

Going back to the purpose of super, you’ll notice it’s a long term investment. When looking at the investment performance of a super fund, it’s generally better to focus on the medium to long term. With this in mind, compare super funds based on their performance over five or 10 years. You’ll also want to compare like for like investment strategies between super funds. For example, you’d compare the Balanced option (70% Growth, 30% Defensive) in one fund to a similar option in another. You can use tools like the Australian Taxation Office’s YourSuper comparison tool to compare performance.

Investment options

Most super funds will allow you to choose how to invest your money. They provide a range of investment options to suit different investment styles and risk profiles. When choosing a super fund, consider whether it offers an option you’d be comfortable investing your funds in. Also consider your changing needs over time and how easily you can adjust your investment strategy.

Fees and costs

Like investment managers, all super funds charge fees. There are various types of fees charged (direct and indirect) in varying amounts. Consider how these fees will impact net investment performance. Once you do select your preferred super fund, also pay attention to how often fees are deducted from your account.

Insurance in super

Getting insurance cover through your super fund is generally more cost-effective than outside super. That being said, you typically can't access trauma insurance within your super, which can help support you through a critical illness or injury. Most super funds provide life; total and permanent disability; and income protection insurance. Rather than simply relying on default cover, see what insurance options are available for you to choose from. Consider the amount of cover, premium rates, and other conditions such as exclusions. And don’t forget to read the PDS and TMD. It may even be worth considering insurance outside of your super if you have specific insurance needs.

Additional services

Beyond the standard service offering, many super funds also provide additional benefits and services. These include access to financial advice, educational events, and bank and health fund discounts. You can easily discover what these extra services are by browsing the super fund’s website.

Super fund governance

All super funds are heavily regulated. However, each super fund has its own approach to governance. Look into their governance approach to make sure you’re comfortable with the level of transparency. Is it aligned with your values?

Personal needs and goals

As you consider all the factors listed above, remember to do so in light of your personal ideology, needs, and goals. Choose a super fund that reflects your values. For example, if you’re passionate about people and the planet, a super fund with ethical investments could be suitable. Also consider how the super fund will meet your current and future needs – is there flexibility for changes in circumstances?

As you’ll discover when you search for the right super fund, there’s no one-size-fits-all. Each super fund has its own features and benefits. It’s about choosing which feature-benefit mix works for you. To find that mix, you’ll need to do your homework – do your research and seek professional advice.

Good luck!