A Guide to Medical and Associated Professions Superannuation Funds

For medical and dental professionals, superannuation is crucial to your future planning for a flexible, lifestyle-driven retirement. You want to ensure that your “nest egg” money is safe. There are many incentives to make superannuation a fundamental part of your overall long-term retirement planning objective and pay significantly less income tax throughout your working life.

We’ve put together this guide to medical and associated professions super funds so you can start to confidently navigate the complex world of superannuation and make informed decisions about your future.

Looking for tailored superannuation advice and solutions to suit your specific needs as a medical professional? Get in touch with our team, and we’ll connect you with a superannuation advisor in Perth who can help.

The Australian superannuation system

Having evolved over many years, the Australian superannuation system is arguably one of the world’s most dynamic retirement and pension systems. Our unique approach delivers high levels of savings for Australians approaching retirement and plays a vital role in developing a much more sophisticated domestic capital market.

Recent budget and legislative changes to superannuation

Super on Government funded paid parental leave

Starting July 1, 2025, parents who have a baby or adopt will start getting extra money towards their retirement savings from the Government’s Paid Parental Leave. These payments to their retirement funds will start yearly from July 1, 2026. This new rule, which AustralianSuper has long supported, aims to reduce the gap in retirement savings that happens when parents take breaks from work to care for their children.

Transfer balance cap increase

Each individual in Australia can access a generous tax-free retirement pension up to the Transfer Balance Cap. The current transfer balance cap has recently been increased to $1.9 million. Most pensions and annuities count toward your transfer balance cap, but it excludes the age pension, other types of government payments, and pensions received from foreign super funds.

Lowered age threshold for downsizers

From 1 January 2023, the minimum eligible age for the downsizer contribution will be lowered from 60 to 55. This will allow eligible Australians to make a one-off contribution of up to $300,000 per person when they sell their family home.

Types of superannuation funds for doctors and dentists

Accumulation funds

Most superannuation funds fall under the accumulation category, where your money grows or “accumulates” over time. In this type of superannuation fund, the value of your super is the sum of

• Employer and employee contributions plus
• Investment earnings in the form of income and capital gains
• Less management and administration fees and tax.

Accumulation funds are subject to market risk and will increase or decrease in value depending on the underlying value of the investments held within the fund.

Defined benefit funds

A defined benefit fund determines superannuation benefit by a formula rather than investment return. Most defined benefit funds are corporate or public sector funds, and many are now closed to new members.

In this type of superannuation fund, your benefit depends on

• How much you and your employer contribute
• How long you have worked for your employer, and
• Your level of salary at or near retirement.

As a guaranteed set formula is used to calculate the end benefit you will receive, this type of superannuation fund is not subject to any form of market risk.

Choosing the right superannuation fund for your needs

There is no one-size-fits-all approach to selecting a superfund for medical and dental professionals. It all depends on each individual’s goals, needs and circumstances. Other factors to consider include:

• Level of contributions and assets
• Risk profile and risk tolerance
• Current and future employment arrangements
• Structure in which the assets are held.

Due to the “Choice of Superannuation Fund” legislation, most superannuation fund members can choose which fund they join. Whatever your circumstances, it is essential to review all your options before making a final decision. If you are unhappy with your current superannuation fund, choice of fund allows you to switch between funds easily.

Should you use a financial advisor for medical superannuation planning?

The APRA December quarter 2020 superannuation statistics show that the average account balance in industry superannuation funds is around $72,389. This average can vary between $60,000 and $170,000 between different industry funds. Many members of industry super funds do not receive any advice and, therefore, miss a great opportunity to take full advantage of what they should be doing with savings throughout their working lives. By comparison, Smith Coffey clients who receive professional financial advice have an average account balance of around $400,000, which is significantly higher due to the significant value advice can add over time.

Whilst many Industry Superannuation Funds place a lot of emphasis on fees, professional finance advice can add significant value over the long term. A financial advisor can guide you through all the crucial decisions that must be made over the long term. This can include answering questions such as:

• Which superannuation fund is most suitable for your needs?
• Which important cash flow considerations need to be made?
• How much should you contribute to superannuation?
• What type of contributions should you make?
• Should you salary sacrifice?
• How should you pay your Division 293 tax?
• What type of risk profile is most suitable?
• How should you invest?
• What do all the rules mean
• How much tax can I save?

At Smith Coffey, we help our clients navigate the complexities of the superannuation system and how best to utilise the very attractive long-term tax savings that are available.

What happens when I meet with a financial advisor to discuss my superannuation?

Your superannuation specialist will review your existing superannuation, find any lost superannuation and create a strategy to reach your retirement goals. We will also discuss:

• Tactical investment
• Merging superannuation accounts
• Tax benefits
• Personal insurance (e.g. income protection)

Is self-managed super worth it?

A self-managed superannuation fund (SMSF) can be worth it for medical and dental professionals who want more control over their retirement savings. Unlike regular super funds, an SMSF lets you choose and manage your investments, potentially leading to better returns if you make smart choices. However, setting up and running an SMSF involves significant time, effort, and costs, including compliance with complex regulations. Therefore, it’s crucial to weigh these factors and consider if you have the knowledge, time, and financial capacity to manage an SMSF effectively. Consulting with a financial advisor can help determine if an SMSF is a good fit for your specific needs and circumstances.

Superannuation Specialists for Doctors and Medical Professionals

Get expert superannuation advice to maximise your income and meet your retirement goals. Book an initial consultation at our cost to understand the trajectory of your superannuation and receive educated and expert financial advice on a strategy that will grow your superannuation and secure your financial future.