APRA has imposed additional licence conditions on HESTA to address risk management and board governance concerns during its transition to outsourced admin providers.
Deficiencies during the transition, which was finalised in June 2025, rendered the $100 billion fund inadequately prepared to effectively oversee and manage the transition, APRA said.
This resulted in a “severe, prolonged disruption to member services and caused direct harm to members”.
Under the conditions, HESTA is required to conduct separate independent reviews of its risk management framework and board effectiveness. The reviews will be comprehensive in scope and will consider HESTA’s management of the transition.
APRA deputy chair Margaret Cole said: “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.
“While some disruption is unavoidable when changing service providers, APRA expects that any transitions are well managed and do not result in any unnecessary impact on members ability to access their accounts.
“APRA’s imposition of licence conditions mean that HESTA is required to take prompt action to address deficiencies. APRA will utilise its powers to hold trustees accountable to meet their obligations to members.”
In a statement, HESTA chief executive, Debby Blakey said: “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.
“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.
“Since the transition we have worked closely with our administration provider to seek to deliver the level of service our members expect and deserve. We are committed to implementing any potential improvements identified so we can better support our members now and into the future.”
This is the second superannuation fund in recent weeks to see additional conditions imposed after Australian Ethical Superannuation (AES) received them last month over its related party expenditure practices.
APRA’s review identified deficiencies regarding the robustness of AES’s approach to related-party expenditure, particularly in relation to investment management agreements with its parent company, Australian Ethical Investments.
Under the additional licence conditions, AES is required to appoint an independent third party to review and recommend improvements to these outsourcing decisions and enhance compliance with key regulatory duties, and to implement any recommendations made.
