MySuper is a default Superannuation product type in Australia, introduced under the Stronger Super reforms, designed for working Australians who do not actively choose a super Investment option. Every MySuper product must offer a simple, low-cost structure with a single diversified investment strategy or lifecycle design, standard insurance cover and capped administration fees. Employers must pay Superannuation Guarantee contributions into a MySuper product for any employee who has not nominated a fund. MySuper products are regulated by APRA and subject to an annual performance test that compares net returns and fees against benchmarks. Benefits can include low fees, basic default insurance and simplicity, while risks include investment Options that may not match individual goals and insurance cover that may be unsuitable for some members. Readers should check fees, insurance settings and the latest performance test results before relying on a MySuper product as a long-term retirement savings vehicle.

What is MySuper in Australia?

MySuper is a category of superannuation product introduced under the Stronger Super reforms that came into effect from 1 January 2014. It was designed to give every working Australian access to a simple, low-cost default superannuation option, regardless of whether they engaged with their super or not.

Before MySuper, default super accounts varied significantly between funds, with different fee structures, investment strategies and insurance arrangements. The MySuper framework was developed to standardise the default super experience and ensure that members who do not actively choose a fund or investment option are placed in a product that meets minimum standards set by the Australian Prudential Regulation Authority, commonly known as APRA.

Under Australian law, employers must pay Superannuation Guarantee contributions into a MySuper-authorised product on behalf of any employee who has not nominated their own fund. As a result, MySuper accounts hold retirement savings for millions of Australian workers, particularly younger employees, casual workers, and those who have not engaged with their super choices.

How MySuper works

A MySuper product is offered by APRA-regulated super funds — including industry, retail, corporate and public sector funds — that have received MySuper authorisation. Each fund can only offer one MySuper product, and it must comply with specific rules around investment strategy, fees and insurance.

When you start a new Job and do not nominate a super fund, your employer will pay your Superannuation Guarantee contributions into a default MySuper account. Since stapling reforms commenced on 1 November 2021, eligible employees are generally 'stapled' to their existing super fund, so new employer contributions follow them between jobs rather than creating a new MySuper account each time.

Inside a MySuper product, contributions are invested according to a single diversified investment strategy or a lifecycle design. A lifecycle product may automatically shift the asset mix from growth-oriented investments toward more defensive Assets as the member approaches a target retirement age. The fund deducts administration fees, investment fees and insurance premiums where applicable, and the remaining balance accumulates over time until the member is eligible to access their super.

Who commonly uses MySuper?

MySuper products are commonly used by:

  • Australians starting their first job who have not researched or chosen a super fund
  • Workers who prefer a simple, hands-off default option for their retirement savings
  • Casual or part-time employees who may move between jobs frequently
  • Members who feel they do not have the time, interest or confidence to choose between investment options
  • Younger Australians who are still building their financial literacy around super

Older or more engaged members sometimes remain in a MySuper product because it suits their preferences for a low-cost, low-decision approach. However, members with specific investment goals, ethical preferences, or significant balances may switch to a 'Choice' investment option within the same fund or move to a different fund altogether.

Key features

  • A single diversified or lifecycle investment strategy chosen by the fund
  • Capped administration and investment fees compared with many active-choice options
  • Standard default insurance cover for death and total and permanent disablement, with income protection sometimes included
  • No entry fees and limited use of performance-based fees
  • Authorisation and ongoing supervision by APRA
  • An annual MySuper performance test administered by APRA, which assesses net returns and fees against benchmarks
  • Portability so that members can generally move their balance to another fund if they choose

Potential benefits

MySuper products may offer several potential benefits for members who prefer simplicity or who have not engaged with their super choices.

Simplicity is one of the main draws. The investment strategy is set by the fund, and members do not need to research or compare different investment options. The fee structure is generally easier to understand than complex menus of investment choices.

Cost can be another benefit. MySuper products are required to be cost-effective, and many have lower total fees than equivalent retail investment options outside super. The annual performance test is intended to discourage funds from offering high-fee products that consistently underperform their benchmarks.

Default insurance can also be valuable. Many Australians who would not otherwise arrange Life insurance receive basic cover automatically through their MySuper product, although the appropriateness of that cover depends on personal circumstances.

Key risks and limitations

Although MySuper products are designed to provide a baseline of consumer protection, they may not suit every member.

  • The default investment strategy may not match a member's Risk tolerance, goals or time horizon
  • Lifecycle designs may shift to defensive assets earlier or later than is appropriate for individual circumstances
  • Default insurance may provide too much or too little cover, or may be poorly suited to non-standard occupations
  • Insurance premiums can erode small balances if the member is not aware of the cover
  • Members who do not review their MySuper product over many years may miss opportunities to improve their outcome
  • Past performance is not a reliable indicator of future returns, even for products that have passed the performance test

Tax, superannuation or regulatory considerations

MySuper products operate within the broader Australian superannuation tax framework. Concessional contributions, including Superannuation Guarantee payments, are generally taxed at 15 per cent within the fund, subject to annual contribution caps and the additional Division 293 tax for higher income earners. Investment Earnings are also taxed at concessional rates inside the fund.

Withdrawals from super are subject to the preservation rules. Most members cannot access their MySuper balance until they meet a condition of release, such as reaching preservation age and retiring, turning 65, or qualifying under specific compassionate or hardship grounds.

The MySuper performance test, run by APRA, applies an annual benchmark to net investment returns and administration fees. Trustees of products that Fail two consecutive tests are restricted from accepting new members into that product until performance improves.

How it fits into Retirement Planning

For many Australians, a MySuper product is the foundation of their retirement savings. Contributions made over a working life, combined with investment earnings and the effect of compounding, can grow into a meaningful balance even when the member does not actively engage with their super.

As retirement approaches, members may consider whether the MySuper default still suits them, or whether a different investment option, fund, or income product is appropriate. Some funds offer lifecycle MySuper products that automatically adjust over time, while others maintain a constant diversified strategy.

MySuper sits inside the accumulation phase of super. Once a member retires and meets a condition of release, the balance can typically be moved into a retirement-phase income product such as an account-based pension, although the rules and options depend on the fund.

Common mistakes to avoid

  • Assuming that the default insurance cover is automatically suitable without checking its terms
  • Holding multiple MySuper accounts across former employers, leading to duplicate fees and insurance
  • Ignoring annual statements and performance test results for many years
  • Switching funds based on short-term return rankings without considering fees, insurance and strategy
  • Confusing the MySuper performance test with personal investment performance
  • Failing to nominate beneficiaries or update them after life changes such as marriage, divorce or having children

Questions to ask before using this instrument

  • What is the long-term net return of the MySuper product after fees and taxes?
  • What is the underlying investment strategy and how is it expected to behave in different market conditions?
  • What insurance cover is included, and is it appropriate for my circumstances?
  • How does the MySuper product compare with the Choice options available within the same fund?
  • Has the product passed the latest APRA performance test?
  • Does the fund offer guidance, calculators or general advice to help me understand my options?

Summary

MySuper is a default category of superannuation product designed for Australians who have not actively chosen a fund or investment option. It is characterised by a simple investment strategy, capped fees, basic insurance cover and ongoing regulatory oversight by APRA, including an annual performance test. MySuper can serve as a sensible starting point for retirement savings, but members benefit from understanding their product, reviewing it periodically and considering whether it still suits their goals as they approach retirement.