Show Us the Receipts: Watchdog Puts Super Funds Under the Microscope

It’s a question every Australian retiree deserves to ask: Where is our hard-earned superannuation money really going? Recent events have put this question front and centre, as regulators shine a spotlight on super funds’ spending habits and customer service – and the findings are raising eyebrows. In an era when every dollar counts for seniors, the push for transparency and accountability in the super industry has never been stronger.

Amanda and Glynn Lewis, a retired couple, found themselves unable to access their own superannuation savings for urgent needs, due to a fund’s prolonged systems outage. They’ve lodged a complaint after waiting weeks for their super to pay a nursing home deposit.



Imagine needing your own money for a critical expense – a surgery or a nursing home deposit – only to be told you can’t have it due to administrative delays. That’s exactly what happened to Judy Flynn, a HESTA member who had to postpone her surgery when her super withdrawal request sat in limbo for weeks during a seven-week system outage. “It’s very stressful… I’m really angry that they’ve done this to me,” she said, after spending hours on hold and getting no response. Another HESTA member, Glynn Lewis, grew concerned his wife might lose her place at an aged care home because he couldn’t access their savings to pay the deposit.

HESTA – one of Australia’s largest super funds – went completely offline for a system upgrade in April, and even though it announced “normal service” had resumed in June, dozens of members reported they still couldn’t access their funds. In response to media inquiries, HESTA apologized for the unacceptable delays and said it was “working hard to resolve these issues quickly”. The whole fiasco highlights a simple truth: the $4.2 trillion super sector is very good at collecting our money, but when it comes to giving it back promptly, it can fall short.


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Credit: Seniors Discount Club


Watchdog Puts Super Spending on Notice​

Snafus like the HESTA outage are just one part of the story. There’s another question lurking: How prudently are super funds spending the other portion of our retirement savings – the part they skim off for fees and operating costs? Australia’s financial watchdog, the Australian Prudential Regulation Authority (APRA), has recently put super funds on notice over this very issue. APRA has bluntly reminded fund trustees that they are spending other people’s money – members’ money – and warned it’s ready to crack down on any wasteful or unjustified spending.

In late June, APRA issued a strongly worded letter to superannuation funds after a deep dive into their financial records. It scrutinized 14 funds in particular (without naming them publicly) where it “observed comparatively higher levels of expenditure or where the member benefit of specific expenditure was not immediately apparent,” reviewing thousands of documents on discretionary spending, marketing, and payments to related entities.

The findings were, in a word, troubling: APRA identified widespread weaknesses in how super funds spend members’ money, including a “lack of rigour when entering into agreements” and big spending decisions made with no clear rationale or tangible benefit to members. Even more concerning, some funds seemed to justify expenses by saying “our competitors are doing it” – essentially copying peers rather than delivering outcomes to members. That kind of keeping-up-with-the-Joneses approach “undermines the intent of (the) Best Financial Interests Duty,” APRA scolded in its letter.

To put it plainly, APRA is questioning whether every dollar a fund spends – on advertising campaigns, sponsorship deals, flashy offices, or even executive perks – is really in your best interest as a member. And APRA isn’t just wagging its finger; it’s sharpening its stick. The regulator’s deputy chair, Margaret Cole, has warned fund executives not to forget they’re spending members’ nest eggs when they sign off on travel, entertainment and other perks – and she’s willing to “test the limits” of the law in court if they don’t get the message. In fact, back in October, APRA even contemplated a blanket ban on certain types of spending (like big-budget advertising or payments to trade unions) but stopped short of outright blacklisting those, opting instead for intensified scrutiny. APRA revealed that in just one financial year (2022–23), super funds collectively shelled out almost $11 billion on their own operations – money that ultimately comes out of members’ accounts.



Where Is Your Super Money Going?​

For years, the nitty-gritty of fund expenses was shrouded in obscurity. Members received annual statements and saw percentages charged in fees, but few of us knew how much of our money was being used for, say, TV commercials or sponsorship of football teams. That’s changing. In a push for transparency, APRA has started publishing detailed breakdowns of super fund expenditures, covering everything from investment fees to admin costs, marketing, sponsorships, and even payments to industry bodies and unions. The data – released for the first time in late 2024 – was eye-opening. It turns out Australia’s super funds are spending over $400 million a year on marketing and advertising alone. And yes, that includes those feel-good TV ads and sports sponsorships you see – all funded by members’ retirement savings.

Let’s talk specifics. AustralianSuper, the nation’s largest fund, emerged as the biggest spender on advertising and marketing. In one year, AustralianSuper shelled out about $60.2 million on promotional activities. This included roughly $43 million on traditional advertising and marketing campaigns, $7.4 million poured into Google advertising (so when you search online, their name pops up), and another $6.3 million funneled into campaigns via Industry Super Australia – the lobbying and branding outfit behind the ubiquitous “compare the pair” ads. To put that in perspective, AustralianSuper spent more on promoting itself than some funds manage in total annual fees!

They’re not alone. The newly merged Australian Retirement Trust (ART), which manages Queenslanders’ and others’ super, was the second-biggest marketing spender at around $41.8 million for the year. Construction industry fund Cbus wasn’t far behind – it spent $34.7 million on marketing, including over $2.3 million in sponsorships and payments to unions and industry groups. Health and community services fund HESTA and Aware Super (which many NSW public servants are with) each topped $30 million in marketing spend. And then there’s Hostplus (the hospitality industry fund beloved by many retirees from tourism or retail jobs): Hostplus handed over $1.8 million of members’ money to sponsor the AFL, and another $1.3 million to sponsor the Gold Coast Suns – a total of more than $3 million spent on footy partnerships in a single year. Yes, you read that right – your retirement savings could be subsidising an AFL team’s kit.

Perhaps most controversially, the APRA data also pulled back the curtain on payments to trade unions and affiliated bodies. Industry super funds collectively paid over $10 million to trade unions in 2022–23. The Construction, Forestry, Maritime, Mining and Energy Union (CFMEU) – a powerful union in the construction sector – was the biggest beneficiary, receiving almost $3.9 million from super funds that year. For example, Cbus (the construction workers’ fund) alone directed about $800,000 in “sponsorship” to the CFMEU, including a quarter-million dollars to the union’s troubled Victorian division. Other unions (from electricians to educators) also received sponsorship cash or payments for partnerships. This was all previously hidden from members, but now it’s documented. Little wonder some politicians have seized on these figures – one senator demanded assurance that none of these payments were misused or ended up in “criminal hands”. At the very least, members deserve to know that these expenditures exist and ask: what member benefit comes from them?



Necessary Investment or Wasteful Splurge? – The Big Spending Debate​

Seeing those numbers, you might feel a mix of surprise and anger. Why on earth are funds spending our retirement money on ads, sponsorships, or handing cash to unions and industry groups? Shouldn’t that money be maximising our returns or lowering our fees? These are exactly the questions APRA is implicitly asking. However, it’s worth noting there are two sides to this debate, and in the spirit of fairness, we should hear them out.

On one hand, critics argue that super funds have gotten carried away, using members’ money almost as a slush fund for self-promotion, political influence, or managerial perks. To such critics, expenses like a $70,000 Christmas party (yes, that happened – APRA itself was questioned for a pricey staff Xmas bash last year) or multi-million dollar sports sponsorships are glaring examples of money that isn’t directly padding members’ retirement balances. “If an adviser took money from a client account inappropriately – what would the reaction be?” one commenter quipped, suggesting a double standard if funds waste members’ cash. Some retirees might also ask: if industry super funds always tout how high-performing and low-fee they are, why do they need to advertise so much?. In fact, one puzzled member noted, “If these industry funds are so good compared to retail funds, why the need for advertising?”.

On the other hand, defenders of the funds’ spending argue that not all marketing or member services spending is “waste” – in fact, it can be an investment in keeping members informed and engaged. Advertising, communications, and advice services might actually improve members’ outcomes by encouraging people to consolidate their accounts, switch out of underperforming funds, contribute more to their super, or simply not panic-sell during downturns. The CEO of the Association of Superannuation Funds of Australia (ASFA), Mary Delahunty, put it this way: “Advertising and sponsorship is just one of many tools that funds use to engage members in a way that promotes informed, confident retirement decisions.” It helps funds “compete, communicate, and deliver value in a free market environment,” she said. In other words, they argue that without some marketing, you might not know about a great fund or you might be stuck in a dud one; healthy competition (aided by advertising) could lead to better outcomes for consumers overall.



There’s some evidence this isn’t pure spin. A recent Investment Trends 2025 Super Member Engagement Report found that funds which invested strongly in member communication and advertising tended to retain and attract more members, and saw improvements in member satisfaction and trust. Around 6% of existing super members (that’s roughly 1 million Australians) said they were prompted by advertising to pay more attention to their super – and 5% of new members actually chose a fund in the past year because an ad influenced them. The industry’s overall member satisfaction and Net Promoter Score (a measure of whether members would recommend their fund) have improved in the past year, and the research linked that to stronger communication and advice efforts by funds. In fact, the report noted a notable jump in Net Promoter Score from an average of -19% to -4% (still not great, but a big improvement) across the super sector, crediting clearer, more proactive member engagement for the boost. “Funds that prioritise clear, consistent, and human-led service are seeing stronger trust and loyalty,” said Investment Trends’ research director Olivia Beringer, adding that advertising and communication play a vital role in this strategy.

So, there’s a kernel of logic to spending on member engagement: a well-informed member might make better financial decisions (like not panicking when the market dips – a common issue, as AustralianSuper’s survey showed), and they might stick with their fund, allowing the fund to grow and potentially lower fees through scale. Moreover, funds operate in a competitive market – if they don’t advertise or offer slick services, they could lose members to rivals, which in the long run could also hurt existing members (for example, less scale might mean higher per-member costs). It’s a balancing act – spend too little on member services and you’re accused of being uncommunicative and neglecting members; spend too much, and you’re accused of wasting money.

Even some within the industry are skeptical about the bang-for-buck of these expenses, however. John Pearce, the Chief Investment Officer of UniSuper, which is one of the country’s largest funds, cautioned that one of the core tenets of big super funds’ value proposition is keeping costs low. He dryly observed that if there were any clear link between higher marketing spending and higher returns to members, “he would be spending like crazy” – but he hasn’t seen such a link. In other words, beyond a certain point, lavish marketing budgets don’t necessarily translate into better outcomes for you, the member. It’s a sentiment many frugal retirees would agree with: show me the value I’m getting for these expenses. Pearce’s fund, UniSuper, prides itself on relatively low fees; notably, it disclosed about $27.7 million in marketing and sponsorship spend but claimed nearly all of it was for services provided internally (essentially paying itself for member education efforts), with only a token ~$92,000 noted as going to an external union body. That at least suggests some funds are trying to keep a lid on third-party promotional costs.



Best Interests Duty: Law and Order for Super Spending​

From a member’s perspective, you might be thinking: isn’t it illegal for trustees to use our money in ways that don’t benefit us? The answer, in theory, is yes. Super fund trustees have always had an obligation to act in members’ best interests, but in 2021 this was tightened to a “Best Financial Interests Duty” (BFID) – basically meaning any spending must be not just in your interests but in your financial interests, and the onus is on the fund to prove it. APRA, as the prudential regulator, shares responsibility for enforcing this duty. BFID was a game-changer because it forced funds to more rigorously justify expenditures. No more blank cheques for pet projects – at least, that’s the idea.

APRA’s recent interventions are very much about enforcing this duty. In its letter to all fund CEOs, APRA laid out some high-level expectations for how super funds should manage expenditures going forward. These included: having a robust decision-making process for spending, with clear links to the fund’s strategy and measurable benefits for members (for example, “if we spend $X, it should result in an estimated $Y benefit or saving for members”); a comprehensive expenditure policy with proper approvals and risk assessment (no more informal deals or handshake arrangements in the boardroom); periodic monitoring and metrics to check if the spending actually did what it was supposed to do for members (and if not, adjust course); and evidence-based reporting that clearly shows the impact on members. In short, APRA is saying: “If you’re going to spend members’ money, show your work – prove to us (and to members) that it’s doing some good.”



To further drive the point home, APRA is ramping up transparency measures. Starting with that 2022–23 data release, APRA will now publish fund-by-fund expenditure data annually. In early 2025, we can expect updated tables revealing exactly how much each fund spent on what in the 2023–24 year. For engaged members, this is a welcome development – it’s like finally getting an itemized receipt after years of hidden charges. You’ll be able to look up your own super fund and see if they’re a high roller on marketing or if they run a tight ship.

APRA has also made it clear that if “areas for improvement” it identified are not addressed, there will be consequences. It has directly told those 14 funds what they’re doing wrong and will be watching to ensure they lift their game. And if they don’t? APRA hasn’t ruled out penalties. In fact, APRA explicitly warned that where it finds practices falling short of legal requirements, it “will utilise the full range of its powers to hold (the fund) accountable.” That could mean enforceable directives, fines, or in extreme cases, disqualifying trustees. It’s rare for APRA to take that kind of drastic action, but the very threat underscores how serious this issue is. No one wants their retirement fund to be the test case in court for a landmark “you wasted members’ money” lawsuit, but APRA is signalling that, if needed, it’s ready to go there.



When Super Funds Fail the Member Test​

The focus on dollars and cents is crucial, but equally important is how super funds treat their members at the end of the day. After all, what good is pinching pennies on expenses if a fund can’t efficiently pay out your benefits or handle your queries when it matters most? Unfortunately, recent scrutiny suggests some funds are falling down on that job, too – and it’s often seniors who bear the brunt, during times of need. We already saw the HESTA tech meltdown example. It turns out HESTA wasn’t the only fund leaving members in the lurch. Australia’s corporate regulator, the Australian Securities and Investments Commission (ASIC), delivered a scathing review in March of how super funds handle death benefit claims (the money paid out to your beneficiaries when you pass away). ASIC found “excessive delays, poor customer service and ineffective claims handling” in many cases – in other words, families left chasing payouts for months on end while dealing with the loss of a loved one.

Over a two-year investigation, ASIC looked into 10 major super funds’ practices on death claims (notably, two of the largest funds – AustralianSuper and Cbus – were excluded from the review only because ASIC was already taking legal action against them for allegedly mishandling death and disability claims). Those 10 funds, by the way, represent 38% of all APRA-regulated super members – so this was a significant sample. The findings were pretty damning. Not a single one of the reviewed trustees was properly monitoring or reporting how long it took to process claims from start to finish. In ASIC’s words, fund leadership didn’t have “a grip on the fund’s data, systems and processes – and ultimately, it is the customers who suffer for it”. Joe Longo, ASIC’s chairman, said this kind of disconnect is unacceptable anywhere, but “in the superannuation sector it is particularly serious, because super affects everyone from the boardroom to the living room”. Think about that: a person might have diligently contributed to super for decades, but when their family needed that money (which can include insurance payouts attached to super), the funds often dragged their feet. ASIC even found cases of misplaced paperwork, and some funds apparently thought offering paltry compensation for delays would make up for the distress caused – which ASIC rightly termed “insulting” in its report (it’s hard to put a dollar value on the emotional toll of these delays).

The ASIC investigation already has teeth: AustralianSuper, the biggest fund, was accused of failing to process thousands of death benefit claims efficiently, fairly, and honestly over 2019–2024. Cbus is being sued for delays affecting over 10,000 members’ death and disability claims. These cases are ongoing, but the message from regulators is clear. Whether it’s mismanaging money or mismanaging service, super funds are being watched and held to account. For senior Australians, many of whom rely on these funds not just for long-term investment but for timely payouts and support during life events, this oversight is critical.

It’s worth noting that regulators and the government have taken other steps to protect members’ interests in recent years as well. The annual performance test, introduced in 2021, has publicly named and shamed underperforming super products – prompting some to cut fees or merge to avoid losing members. There’s also been legislation to ensure inactive accounts and those belonging to deceased members are dealt with more promptly. And just this year, the government is exploring ways for super funds to provide simpler (and cheaper) financial advice to members, so retirees can actually get guidance that may prevent costly mistakes. All these moves recognize a common theme: the money in super is your money, and the system needs to remember that at every turn.


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Credit: Seniors Discount Club


The Bottom Line – And a Question for You​

After all this, you might be feeling a bit conflicted. On one hand, Australia’s superannuation system is often praised internationally – it has delivered generally strong investment returns for millions of people and helped many retirees live more comfortably than if we had no compulsory savings. On the other hand, it’s clear that not every dollar put into super is sacred. Some of it gets chipped away by fees and, as we now know, by expenditures that may or may not benefit members. The good news is that the regulators are on the case, and transparency is improving. We now have data revealing exactly how funds are spending our money, and there’s increasing pressure on those funds to justify every decision. The days of “because we felt like it” spending are over – or should be, if APRA’s tough talk translates into action.

For Australian seniors, who are either drawing on their super or soon will be, these developments are worth paying attention to. Trust is a crucial element here. We entrust these funds with a significant chunk of our lifetime earnings. We trust them to invest wisely, to keep our accounts secure, to charge only what’s necessary, and to be there for us with efficient service when we need our money out. When that trust is shaken – whether by a story of a retiree unable to get her surgery money, or by revelations of millions spent on things unrelated to our retirement outcomes – it’s only natural to feel uneasy. The hope is that shining a light on these issues will lead to better practices: more transparency, more member-focused spending, and faster, more compassionate service.

Ultimately, it might also spur each of us to be more engaged with our super. Do you know how your fund stacks up on fees, performance, and now, discretionary spending? If not, the information is increasingly out there – and it’s your right to know. Some funds hold annual member meetings (a bit like shareholder AGMs) where you can ask questions. It might be worth asking, “Can you walk us through what you spent on member marketing or sponsorships last year, and why?” The very act of asking these questions sends a message that members care and are watching.

APRA’s intervention and ASIC’s crackdowns signal a cultural shift: super funds are being reminded that they exist to serve members first and foremost. Not their own executives, not affiliated organizations, not even their own growth for growth’s sake – but the people who trust them with their retirement. Most funds, to be fair, do take that duty seriously. But as the saying goes, sunshine is the best disinfectant. By bringing these issues into the open, improvements will hopefully follow.

So, where does that leave us? Perhaps with one final, thought-provoking question: Do you feel confident that your super fund is truly acting in your best interests – and if not, what would you like to see change?

READ MORE: HESTA member couldn't access super for surgery due to fund outage, dozens report ongoing issues
 
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Not good, but clearly some money needs to be spent on communications, advertising and staff. Junkets should be off limits unless they benefit members e.g. exploring investment opportunities. Most of the funds named in the article are industry funds, and they usually have better returns and are better managed compared to other funds.
 
More SDC scaremongering.
This is not the norm..
A one off issue caused by a system upgrade..
Any time we wish to withdraw money from our Super it is in our bank account within 3 days…
 
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More SDC scaremongering.
This is not the norm..
A one off issue caused by a system upgrade..
Any time we wish to withdraw money from our Super it is in our bank account within 3 days…
This forum does very good exaggerations out of nothing and other unsubstantiated claims. They rarely have original news, most of it has been reported previously.
 
I only have $15,000 left in my super account. I've had to use my super for the past 18months while waiting for Centrelink to grant me the aged pension. I kept putting in forms and after 12 weeks being told to resubmit. Looks like my kids are going to have to help support me in later life.
 
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Reactions: Veggiepatch
the unions you are forced to join in order to work?
NO, that is nonsense and showing ignorance, Union membership is about 15%. I am in a industry fund and have NEVER been a union member, nor did I qualify as a member. People join because they are better
 

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