Over 14 million Australians have a super fund account as of December 2014, according to the Australian Taxation Office (ATO). However, picking a superannuation fund can be a bit daunting. Not only are there a plethora of options to choose from, but you’re probably feeling a bit uncertain about the future – after all, it could be decades before the time comes to leave the workplace. Choosing an unsuitable fund now could be the difference between living comfortably in retirement or struggling, so it’s essential you make an informed decision.

Are you eligible to choose?

Making up your own mind is probably the most appealing way to set yourself up for retirement. Your employer has to give you a form that documents your choice in writing, whether you go with their fund or not. However, while most people can pick their fund, for your employer’s contribution, you’ll need to double check whether or not you’re eligible to do so. The ATO states that you’re entitled to choose a super fund if:

• your employer’s super contributions are paid under a federal award or former state award
• you’re employed under another award or agreement that doesn’t need extra super support

Be aware that if super is paid under a state award or industrial agreement – for example, a contract worker hired for their labour – or employed in the public sector, you won’t be able to choose the fund. This is also the case with certain workplace agreements, so it’s worth getting advice to find out if you can pick out your preferred option.

Types of funds 

If you’re feeling overwhelmed with all the choice, it’s little wonder: There are around 300 or so funds on offer, according to SuperGuide. This might seem like a lot, but in reality this vast quantity is broken up into categories. There are just five types of super funds in Australia and, in actual fact, you will probably only be able to join around three of them – and the fund has the final say. According to the ATO, the ones open to everyone are: retail funds, self-managed super funds (SMSF) and, on occasion, industry funds.

Double check whether you fit this criteria before weighing up your possibilities.

What to look for

Low fees should be a big draw for your super fund choice. According to research from the Grattan Institute, Australians could be paying around three times more in super fees than they need to, which makes picking a well-priced scheme incredibly important for your long term financial health. Check what insurance is available to protect the fund, and compare how it has performed in recent years.

It might be tempting to pick the best performing option from the last few months, but take this with a grain of salt. Past performance isn’t always an indicator of future performance, so it’s usually better to pick a consistent option.

Consider how your needs will change as you get older – do you intend to invest in property, or would you like the ability and flexibility to manage your own finances? If so, a SMSF might be suitable, but make sure you get advice before going down this path.