How to choose a super fund

When your kids start working, their employers must start contributing to a superannuation fund if:

  • They’re 18 years or older, regardless of how many hours they work.

  • Younger than 18 years, if they work more than 30 hours a week.

Up to July 2022, employees had to earn a minimum amount to qualify for super. But now employers must always contribute a portion (currently 10.5%) of employees’ ordinary-time earnings if they meet the above conditions.

Choosing a fund

In most cases your kids can choose which fund their employers must pay their super to. Depending on their jobs and employers, they may be able to choose from an:

  • Employer-sponsored fund

  • Industry fund

  • Retail fund

There are many industry and retail funds, and you may need to help your child choose one. There are online comparison websites like the Australian Taxation Office’s YourSuper comparison tool to help you.

When choosing a fund, you should compare these five factors:

1. Investment options

An employer’s contributions, and any extra contributions your child makes, are invested by the super fund.

Your child should choose a super fund that has an investment option that matches their future goals. Mostly the funds will offer these choices:

  • Growth – your child’s contributions will be invested mostly in shares or property that can achieve long-term growth.

  • Balanced – most of the contributions will be invested in shares or property, but some will be invested in cash products.

  • Conservative – most of the contributions will be invested in cash investments, with only some invested in shares and property.

  • Cash – all of the contributions will be invested in Australian deposit-taking institutions (i.e. banks) or life insurance policies, both of which have low risk and low returns

There may be other options like ethical investments, where the fund will only invest in companies that use green energy or meet certain social standards.

You can also help your child learn to save even before they start working and contributing to a super fund with FLX. Simply transfer money from your Flexischools account to your child’s FLX account. Your child can set a savings goal and allocate some of their money to that goal. Once the goal is reached, they can spend the money.


2. Performance

When you’ve selected an investment type, you can compare funds’ returns over the past five years. It’s important to make apples-for-apples comparisons – for example, to compare one fund’s growth option with another’s.


3. Fees

Super funds charge fees, which can be monthly, annual or event-triggered, like switching investments. Generally, lower fees are better, but you should also consider the fund’s performance.


4. Insurance

Insurance is no longer automatically included. So you would have to discuss with your child whether they will opt-in to insurances like:

  • Life insurance

  • Total and permanent disability insurance

  • Income protection

If they are opting in, you would need to compare the costs and benefits of the policies offered by the different funds.


5. Benefits 

Super funds may offer extra services like:

●      Free financial advice and webinars

●      Family access benefits

●      Member discounts

You can help your kids learn to save and manage their finances from any age with FLX. Kids can set savings goals in the FLX app and transfer money to that goal. Once they reach their savings goal, they can use the prepaid FLX card to buy the item. You can sign up to FLX here.

This is general advice. Read the PDSs & TMDs at before deciding if FLX is right for you. The FLX Services & Flexischools are provided by InLoop Pty Ltd ABN 27 114 508 771 AFSL 471558 (trading as Flexischools). The FLX Prepaid Mastercard is issued by EML Payment Solutions Limited ABN 30 131 436 532 AFSL 404131 pursuant to license by Mastercard Asia/Pacific Pte. Ltd.


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