What is MySuper?
A MySuper fund is a low-cost, simple superannuation fund product. A MySuper product is usually the default super product offered by superannuation funds to members, and it's where the majority of Australians have their super invested.
What is MySuper?
MySuper is a type of superannuation account, and is usually the default option offered by Australian super funds. This means when you join a super fund you'll automatically be placed in the fund's MySuper investment option, unless you choose to be in a different option.
All Australian employers have a default super fund for employees who don't already have their own super fund, or who don't want to choose a super fund themselves. MySuper is a government initiative to provide simple super products for employers to choose as their default fund for employees. MySuper options have basic features and fee structures allowing members to compare funds easily based on cost, investment performance and insurance.
The idea of MySuper products is that they are low-cost, simple products without any confusing investment options or special features that are hard to understand. MySuper products are offered by both retail super funds and industry super funds as an investment option alongside their existing investment options.
The features of MySuper
MySuper typically have the following features:
- Low fees (although some are much higher than others, so you still need to compare)
- Simple features
- Simple, default insurance options which you can easily opt out of if you wish
- A single diversified investment option, or
- A lifecycle investment option based on your age
- Investment strategy that isn't too high-growth, or too conservative
MySuper investment options
There are two main investment options offered by MySuper products; a diversified investment portfolio or a lifecycle strategy that invests based on your age.
Lifecycle investment option
With this option, your super is invested according to your age. For example when you're young your super will be invested in more high-risk growth assets like local and international shares, because you have more time to ride out any market volatility. If you're older (for example in your 50s) your super will be invested in more low-risk options like term deposits and bonds.
This is a good set-and-forget investment strategy because it will be adjusted for you as you get older, to make sure it's invested appropriately. This means you won't have to think about your super until you're looking to retire, which is appealing for a lot of people who don't want the stress of managing their super.
Single diversified investment option
This investment option offers one single diversified portfolio (diversified simply means it's got a mix of different assets, such as shares, property, infrastructure, fixed interest and cash). This option doesn't invest in line with your age, but is still managed on your behalf and continually adjusted. A lot of these investment options will allocate about 70% of your super balance to growth assets (higher risk, but higher return assets like shares) and about 30% to defensive assets (like cash products). They're usually called 'Growth' or 'Balanced' options.
MySuper options: Some popular examples
It's likely that the super fund you've currently got your super balance in is a MySuper fund, but just isn't named as such. Here are some examples of popular super funds and their default MySuper option.
|Super fund||MySuper product|
|Australian Ethical Super||Australian Ethical Super Balanced|
|Sunsuper||Sunsuper Lifecycle Balanced|
|REST Super||REST Super Core Strategy|
Compare super funds
Disclaimer: Performance, fees and insurance data is based on each fund's default MySuper product. Where the performance, fees and insurance data for the MySuper fund vary according to the member's age, results for individuals between 40-49 years of age have been shown. This article is general advice. You should consider your own personal circumstances before deciding if a superannuation product is right for you. Superannuation is a long term investment and past performance is not indicative of future performance.
The pros and cons of MySuper
- Lifecycle investment strategy is a great set-and-forget option.
- MySuper must offer a standard level of life and Total and Permanent Disability (TPD) insurance.
- MySuper is easy understand, and simple to use and manage.
- MySuper should have lower fees than standard retail super funds
- Some critics say MySuper places too much emphasis on low fees and not enough on performance.
- If you want to be very 'hands-on' with your super this option might not be for you
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