You’ve worked hard all your life and plan to soon start enjoying your retirement, so now you’re faced with some big financial decisions.

What you do will depend on your personal situation, with many retirees taking advantage of the windfall to pay down debt and maybe buy a new car or caravan. But once those issues are dealt with, most people have to decide on what to do with their super pension.

There is a common assumption that Aussies take their super as a lump sum and blow it. But figures from Industry Super Australia show that this is not the case.

Around 85 per cent of the assets in superannuation are converted into an allocated pension when people retire. That is not the same as 85 per cent of people retiring, as those with lower balances, say under $20,000, are more likely to take it all out as a lump sum.

Nonetheless, it means that a large number of people are taking their super as  pensions, not a lump sums.

There are choices when it comes to pensions. You can arrange a pension through your current super fund, or look for a better deal in another fund.

Deciding which fund to choose is very complex. Steve Mickenbecker, research chief with comparison site Canstar, says its not just about costs and returns. “There are issues like online access, services, availability of advice and income payment options.”

Canstar has run the numbers on 64 account-based pension offers from 57 different fund managers and came up with the top five in three categories: low balance, medium balance and high balance.

“The weighting of those other factors to costs depends on the size of your account,” Mr Mickenbecker said. For low balance accounts, its 80 per cent cost and 20 per cent other factors, for medium its 70/30 and for high balance its 65/35,” he said.

Canstar categorises low balance accounts as averaging $100,000, medium $400,000 and high $700,000 or more. The results look like this for low balance funds.

For medium balance funds the list is slightly different with two retail funds and three industry funds among the most preferred.

And for the outstanding value list of high balance funds the list is different again.Mr Mickenbecker says the difference between ratings for different funds is a factor of the different needs of small and larger investors.

If you have a small fund, cost is the supreme factor because there is less scope to profit from more complex investment strategies. For larger funds there is more value on getting individualised advice and considering more complex investment options.

These lists are not in order of preference but consist of five outstanding offers in each category. As Mr Mickenbecker observed earlier, factors other than price are considered in ranking funds.

So while the variation in costs can be quite marked, the influence of the other factors listed already can lead to funds that look considerably more expensive than their peers listed among the top funds.

Despite these variations, costs are a major factor in fund rankings, with Canstar giving its five star awards across all categories to funds with low costs. To see Canstar’s complete survey, click here.

As the above chart shows, if you end up with your money in the wrong pension fund, you will pay dearly for it over your retirement years.