Financial
Roadmap
A clear, personalised path to your financial goals.
28 March, 2023
Defined benefit versus accumulation superannuation – What you should know
First Financial Team
When Australians start working, they usually become members of an accumulation superannuation fund. But 40-plus years ago, many of those who were lucky enough to get super from their employers at all started on a defined benefit fund.
While defined benefit funds are no longer open to new members, some Aussies who are nearing retirement are members of those funds – and here we explain the difference between the two types of superannuation funds.
The difference between defined benefit and accumulation super funds
A defined benefit plan is a type of retirement plan that local government bodies, certain water authorities and other government and semi-government authorities offered to employees before 1994. It closed to new members on 31 December 1993.
This means that today, only those who were employed by a relevant authority before 1994 and who have remained employed by them ever since are members of this type of plan.
An accumulation fund, which is the most common type of super today, is a type of superannuation plan where your employer contributes a set percentage of your salary into your super account, and you are responsible for investing and managing your retirement savings.
You also have power over how much money you would like to contribute, by using the salary sacrificing option or by contributing extra cash to your fund.
The benefits and disadvantages of each fund type
Defined benefit plans
Defined benefit plans offered retirement income certainty. Back in the 1980s and before, your employer promised to pay you a specific amount of income based on a predetermined formula that took into account factors such as your salary, years of service and age. This meant that your employer guaranteed you a fixed income for life.
Your employer bore the investment risk, and you didn’t have to worry about where to invest your retirement funds.
However, the downside of a defined benefit plan is that it was not flexible. You had no control over the investment of your retirement savings and you couldn’t choose where to invest your money. This meant that you were not free to make your own investment decisions and might not have had the opportunity to grow your retirement savings as much as you would have liked.
Accumulation super funds
Accumulation plans offer more flexibility and control over your retirement funds, as you have the freedom to choose how and where to invest your savings. However, the investment risk lies with you, and the amount you receive upon retirement depends on how well your investments perform.
Engage a professional advisor to understand your options
Whether you are in a defined benefit fund or an accumulation fund, they can be complex and hard to understand.
Understanding the fund that you are on and how that impacts your retirement will enable you to make informed decisions.
At First Financial, we can help you to make the most informed decision in your countdown to retirement. If you need more clarity about your defined benefit or accumulation super fund, contact one of our advisors today.
YOUR FINANCIAL JOUNEY
Building your financial future
Every client journey begins with a conversation. We look closely at where you are now, what matters to you, and what’s possible. Then we structure our advice to match.
Financial
Tax
Efficiency
Proactive strategies to maximise your tax savings.
Personalised
Investing
Tailored plans aligned with your goals and risk profile.
Ongoing
Support
Regular guidance to keep your plan on track.
CLIENT STORY
Lyn
Life Stage:
Retired widow
Background:
Lyn stepped into financial management for the first time after her husband's passing. With patience and care, First Financial supported her through grief, learning, and empowerment.
- Had never managed finances before
- Was overwhelmed after her husband’s passing
- Needed plain-English explanations and patience
- Sought emotional support and practical clarity
- Offered caring, respectful advice at her pace
- Rebuilt confidence with diagrams, stories, and reassurance
- Supported gradual decision-making around retirement
- Remained a trusted constant through major transitions
“After my husband passed, I was completely unsure where to start. First Financial gave me the space to learn, to ask questions, to grow confident. They drew a diagram that I still have. And now, I sleep well at night knowing I’ve got someone in my corner.”
CLIENT STORY
Tim and Adam
Life Stage:
Early retirement and working professional
Background:
When Tim received an overseas medical settlement, he and Adam had just 14 days left in a 90-day window. They needed clear guidance, fast. A referral led them to First Financial.
- Only two weeks left to meet urgent legal and financial deadlines
- Wanted to preserve capital while setting up income for the future
- Needed a plan that supported both retirement and ongoing work
- Hoped to find advice that felt personal, not transactional
- Managed every moving piece, from legal documents to super rollovers
- Designed a strategy that supported both Tim’s retirement and Adam’s career
- Offered clear guidance with steady follow-through, with no stress or pressure
- Built in ethical investing and flexibility, without sacrificing performance
“We’re in totally different life stages, but First Financial built a strategy that supports us both. From urgent legal steps to ethical investing, they handled every detail with calm, care, and real expertise. It’s financial freedom without compromise, and we couldn’t have done it without them.”
CLIENT STORY
John
Life Stage:
Retired business owner
Background:
After decades of running a successful pharmacy, John sought financial guidance to simplify decision-making and support long-term planning.
- Navigated the sale of a long-held business
- Wanted simple, honest advice after burnout
- Needed a hands-on adviser he could talk to
- Desired financial guidance aligned with lifestyle goals
- Crafted a strategy that supports relaxed, post-work life
- Offered approachable, plain-English advice
- Maintained an ongoing, trustworthy relationship
- Provided flexibility with investments and cash flow
“I feel genuinely supported by First Financial. I can ask anything, and there’s no pressure, just clear advice and real care. The money’s growing, I’m not stressed about it, and I feel completely at ease for the first time. I don’t miss work, but I’d miss the support I get from First Financial.”
CLIENT STORY
Jan
Life Stage:
Retired
Background:
Jan's husband managed the finances until entering aged care. Jan gradually stepped into the financial picture with First Financial’s support.
- Needed financial guidance after business sale
- Lacked experience managing complex finances
- Sought consistent income and long-term structure
- Wanted a familiar, reliable relationship
- Provided long-term support through several transitions
- Helped structure income reliably for retirement
- Empowered Jan through education and reassurance
- Delivered calm advice through both grief and growth
“The money just comes in. I don’t have to think about it. And I know they’re always there. They’ve always been there in the background, just quietly making things work.”
CLIENT STORY
Graeme and Craig
Life Stage:
Retired and semi-retired
Background:
Referred by friends helped through aged care, Craig sought secure financial guidance after inheriting funds.
- Invest inheritance securely without high risk
- Maintain a modest lifestyle with confidence
- Building trust for someone new to advice
- Accessible, personalised advice
- Provided a low-risk strategy with regular income
- Reassured with steady, market-aware updates
- Established trust through responsiveness and warmth
- Delivered calm, expert support through all transitions
“We feel very secure with First Financial, the income just comes in, and we know everything is being looked after. It’s not just safe, it’s smart. We’ve recommended them to others because we genuinely believe in the team.”
CLIENT STORY
Larry and Virginia
Life Stage:
Newly retired
Background:
As retirement neared, Larry and Virginia were ready to enjoy travel, family, and freedom, without uncertainty. A friend recommended First Financial, and from the first meeting, they had a clear plan, a safety net, and people they trusted.
- Wanted to travel and enjoy retirement without second-guessing finances
- Needed a structured income plan with buffers for the unexpected
- Valued guidance that felt honest and human, not overcomplicated
- Needed people they could call and count on
- Created a reliable income stream with a set-aside safety net for the unexpected
- Gave them the freedom to travel and spend meaningfully with family
- Kept advice simple, thoughtful, and tailored to what mattered to them
- Built a lasting partnership based on trust
“We’ve travelled the world, Europe, Sri Lanka, Vietnam, without once stressing about the money. They made everything feel simple and gave us the confidence to live well. We feel secure because we know exactly where we stand, and that peace of mind means everything.”
Meet our advisers
