Superannuation funds operate as trusts with trustees being responsible for the prudential operation of their funds and in formulating and implementing an investment strategy. Some specific duties and obligations are codified in the Superannuation Industry (Supervision) Act 1993 – other obligations are the subject of general trust law. Trustees are liable under law for breaches of obligations. Superannuation trustees have, inter alia, an obligation to ensure that superannuation monies are invested prudently with consideration given to diversification and liquidity.

Types of superannuation funds

Share of superannuation industry fund assets
There are about 500,000 superannuation funds in operation in Australia. Of those, 362 have assets totalling greater than $50 million.

There are six main types of superannuation funds:

    • Industry Funds are multi employer funds run by employer associations and/or unions. Unlike Retail/Wholesale funds they are run solely for the benefit of members as there are no shareholders.


    • Wholesale Master Trusts are multi employer funds run by financial institutions for groups of employees. These are also classified as Retail funds by APRA.


    • Retail Master Trusts/Wrap platforms are funds run by financial institutions for individuals.


    • Employer Stand-alone Funds are funds established by employers for their employees. Each fund has its own trust structure that is not necessarily not shared by other employers.


    • Self Managed Superannuation Funds (SMSFs or Do-It-Yourself Funds) are funds established for a small number of individuals (fewer than 5) and regulated by the Australian Taxation Office. Generally the Trustees of the fund are the fund members (where there is a Corporate Trustee, the members are the directors of that company).
    • Small APRA Funds (SAFs) are funds established for a small number of individuals (fewer than 5) but unlike SMSFs the Trustee is an Approved Trustee, not the member/s, and the funds are regulated by APRA. This structure is often used for members who want control of their superannuation investments but are unable or unwilling to meet the requirements of Trusteeship of an SMSF.
    • Public Sector Employees Funds are funds established by governments for their employees.

Retail and Wholesale Master Trusts are the largest sector of the Australian Superannuation Market

Choice of superannuation funds

From 1 July 2005, changes to the law mean that many Australian employees are able to choose the fund their employer’s future superannuation guarantee contributions are paid into.

Choice of superannuation funds allows workers to:

  • change funds when their current fund is not available with a new employer;
  • consolidate superannuation accounts to cut costs and paperwork;
  • change to a lower-fee and/or better service superannuation fund;
  • change to a better performing superannuation fund.

The changes made in 2007, enables barrowing funds for acquisition of commercial properties.