Public trust in Australia’s superannuation system has been tested following a series of cyberattacks, operational incidents and fund governance failures, according to Australian Prudential Regulation Authority (APRA) executive director Carmen Beverley-Smith.
Addressing the ASFA Conference 2025, Beverley-Smith said that trust—once readily gained in a system recognised globally for its strength—“should never be taken for granted.”
Beverley-Smith noted that community expectations and scrutiny are being shaped through the methods that funds undertake in handling each new challenge and how they are supporting their members through such challenges.
Alluding to the fall-out from the Shield and First Guardian collapses which affected thousands of super fund members, she said funds should strive to maintain member confidence.
“The events of this year serve as a reminder that trust is not static,” she said. “Funds must continuously strive to maintain member confidence in their super as the stewards of it.”
In her remarks, Beverley-Smith identified three “baseline capabilities” critical to maintaining member confidence: strong leadership, operational resilience and a genuine commitment to acting in members’ best financial interests.
Leadership and governance
Beverley-Smith highlighted the need for strong, transparent and accountable leadership across Australia’s $4.3 trillion super industry.
“Leaders set the tone, the direction, the expectations, the standards, the culture and ultimately determine the performance and success of their organisations,” she stated.
She confirmed that APRA is engaging with the industry to strengthen board governance standards across superannuation, banking and insurance, with draft governance standards expected in the second quarter of next year.
Beverley-Smith further remarked that APRA has found weaknesses in trustee board oversight, particularly in investment governance, unlisted asset valuations and liquidity risk management.
A recent thematic review found that 12 of 23 trustees required material improvement, while another review of platform trustees uncovered “significant weaknesses” in due diligence, monitoring and remedial practices.
As a result, the regulator has directed those trustees to address deficiencies urgently and warned that supervisory or enforcement action will follow where needed.
“We expect this will be an ongoing, significant area of focus into 2026,” Beverley-Smith added.
Operational resilience and cyber security
Beverley-Smith emphasised that Australians expect super funds to “collect, grow and protect their retirement savings” without disruption, and cited operational resilience as essential in an industry increasingly reliant on digital systems and third-party providers.
The introduction of APRA’s CPS 230 standard and the Financial Accountability Regime this year has, according to the executive director, clarified trustees’ obligations to manage operational risks effectively.
Meanwhile, cyber resilience remains a top concern, following recent credential-stuffing attacks that exposed weaknesses in authentication.
Beverley-Smith reiterated that “multi-factor authentication is the bare minimum expectation”.
APRA is currently assessing industry responses and expects trustees to demonstrate compliance with information security standard CPS 234 “on an ongoing basis.”
Acting in members’ best interests
Beverley-Smith said some trustees are still falling short of their legal duty to act in members’ best financial interests, particularly in expenditure decisions.
APRA has intensified its scrutiny of fund spending on sponsorships, marketing and entertainment, with 14 trustees reviewed over the past year.
She also warned that many funds are lagging in implementing the Retirement Income Covenant, which requires strategies to support members transitioning to and living in retirement.
“There is a clear and growing gap between trustees who are meeting baseline expectations and those who have embraced retirement as a strategic and competitive imperative,” she said
With 2.5 million Australians expected to retire this decade, Beverley-Smith cautioned that funds doing “the bare minimum now may struggle to retain members when better retirement support and solutions are being offered elsewhere”.
Concluding her remarks, Beverley-Smith reminded industry leaders that trust remains their most valuable asset.
“While you are the custodians of trillions of dollars of retirement savings for the majority of people in this country, their trust is arguably the most important asset you will ever manage,” she said.
