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The financial regulator has slapped extra licence conditions on the super fund HESTA, citing concerns about its risk management and governance during a recent technology change that left members in the dark.
Earlier this year, HESTA had a major technology upgrade that resulted in members being unable to access their accounts online for about six weeks, and there were also significant delays in its call centres after that.
HESTA chief executive Debby Blakey apologised for the delays and said the fund would cooperate with the regulator.Credit: Renee Nowytarger
The Australian Prudential Regulation Authority (APRA) today said it had found “deficiencies” in the fund’s board governance and management of risks, which meant it was not properly prepared to manage the transition.
HESTA, which has about 1.1 million members and manages about $100 billion in retirement savings, must now conduct independent reviews of its risk management framework, and the effectiveness of its board.
“APRA expects trustees to demonstrate strong governance and risk management in their oversight of critical operations and material service providers. That responsibility is further heightened when a service that is critical to members is at risk,” said APRA’s deputy chair, Margaret Cole.
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HESTA chief executive Debby Blakey apologised to the fund’s members, and said it was committed to implementing any improvements that are identified to better support members.
“We take the matters raised by APRA very seriously and are cooperating fully with the regulator to resolve them. We apologise to members who experienced delays during our transition to a new administration provider,” Blakey said.
“The change to a new administration platform in June was made with a long-term focus on delivering better, more personalised service to our members.”
Super Consumers Australia chief executive Xavier O’Halloran welcomed APRA’s move, saying it was a lesson to all funds going through similar transitions that they need to put their members’ interests first.
“HESTA caused serious harm by failing to deliver basic services, with many unable to contact their fund for months. People lost access to their money, faced extreme uncertainty and wasted time because of these failures,” O’Halloran said.
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“We heard from one grandmother who was forced to pick up her grandchildren on a bike after she was unable to access her money at HESTA to pay for urgent costs after her car broke down.”
The APRA action comes as regulators have in recent years put a growing emphasis on how the $4.5 trillion superannuation sector deals with customer service, with landmark cases launched against funds over delays in paying death benefits.
Meanwhile, separate figures released on Thursday showed funds performance slipped in November as global sharemarkets wobbled. However, super funds are still on track to make above-average returns this year, despite volatility on markets.
The data from SuperRatings showed the typical “balanced” investment options returned -0.5 per cent last month, though 2025 was likely to be a positive calendar year for the sector.
It was the first month of negative returns in seven months, and SuperRatings director Kirby Rappell said there had been a pullback in most asset classes, including listed property and Australian shares.
“While this month breaks the strong run, 2025 is well on track to be an above average year for member balances, with the 11 months to 30 November 2025 estimated to have returned 8.7 per cent against a median of 7.1 per cent for the full year since 2000,” Rappell said.
Super funds’ returns have been bolstered by a strong performance from global shares this year, despite the plunge on US President Donald Trump’s “Liberation Day” in April, and the more recent debate about artificial intelligence valuations.
The ASX is up about 4.7 per cent so far this year, while Wall Street’s S&P500 has climbed about 17 per cent.
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