SYDNEY, Nov. 6 -- Australian Prudential Regulation Authority issued the following media release:

Good morning, and thank you for the opportunity to join you today to discuss APRA's priorities for superannuation.

From the outset, I want to acknowledge the important role of the trade union movement in the establishment of the Superannuation Guarantee (SG) in 1992, and in the subsequent development of Australia's superannuation system.

The recent Intergenerational Report highlighted the extraordinary growth of the system, from $148 billion when the SG was introduced to nearly $4.8 trillion today. This includes around $3.4 trillion in APRA-regulated funds.

With Australia's retirement savings system on track to become the second-largest pension market in the world, it is a remarkable success story, and many of you in this room have contributed to that success.

These contributions deserve to be recognised, and are best honoured by a renewed commitment to making the system even stronger, so that it remains sustainable, well governed and capable of serving members in a rapidly changing world.

Because with success has also come greater responsibility.

Given its size and scale, superannuation has become a systemically important part of the Australian economy, increasingly interconnected with global markets and critical to the financial wellbeing of millions of Australians.

And while great success has been achieved in accumulation, the next phase of the system's development will present different challenges.

More Australians are moving into retirement. At the same time, trustees are confronting an increasingly threatening external environment, including escalating cyber and AI risks, heightened geopolitical tensions, and economic and market volatility.

These risks are evolving quickly. They are becoming increasingly interconnected and, in many cases, have the potential to affect millions of members simultaneously.

The combination of these forces is reshaping what is required of trustees. It demands new capabilities, new investments and, in some cases, new approaches to governance and risk management.

How APRA is facing into the challenges

APRA's mandate in superannuation is to ensure Australians can have confidence that the superannuation funds they rely upon are safe and resilient, and put members' best financial interests first.

In keeping with that mandate, and our commitment to getting the balance right, we are focused on the biggest challenges that pose the greatest risks to members and to the system.

Historically, that would have meant focusing primarily on financial risks.

But in the current operating environment, it is some of the non-financial risks, including cyber, AI, operational resilience and geopolitical risk, that worry me most.

Because if left unchecked, these risks can very quickly become significant financial risks.

In June, for the first time, APRA published a letter to industry setting out our minimum expectations for entities to strengthen their readiness for geopolitical shocks. And as outlined in this year's Corporate Plan, we have now required selected entities to undertake targeted readiness assessments covering crisis preparedness, personnel risk and political risk.

In stage one, which includes 12 of the largest superannuation trustees, participants have been asked to assess whether their existing arrangements would support an effective response to a "severe but plausible" geopolitical shock.

The objective is straightforward: to give us greater confidence in the preparedness of individual entities and of the system as a whole.

Preparedness for AI-enabled cyber attacks is also critical.

APRA has been working to strengthen information security controls across our regulated entities for many years, but the need for continuous uplift remains.

That became clear last year when credential-stuffing attacks against eight superannuation funds caused operational disruption for many members and exposed widespread and material deficiencies in preparedness for attacks of this type among affected funds. They also sounded a warning for the broader industry.

Earlier this year, APRA and ASIC, with support from the Australian Signals Directorate, brought together more than 600 participants from across financial services to consider the risks posed by AI.

Through those roundtables and our other engagements with trustees, there has been broad recognition that AI is accelerating the pace, scale and sophistication of cyber threats, as well as the need for effective governance and resilience.

But we have also observed considerable variability in board engagement, director capability and organisational maturity in dealing with these challenges.

And that brings me to a broader question.

The significance of these risks is not simply that trustees need better systems or stronger controls. They also raise a more fundamental question: do trustees and their boards have the capabilities they will need for the decade ahead?

Equipping trustees for the next chapter of superannuation

None of us can see into the future.

But there are some things we do know.

An estimated 2.5 million more Australians will move into retirement over the next decade.

That means millions more Australians will be relying on superannuation not simply to build wealth, but to provide income and financial security throughout retirement.

They will interact more directly and more regularly with their super funds. They will be drawing down payments and will potentially be more exposed to the consequences of administration and payment system disruptions, fraud and scams.

This represents a profound change in what Australians will require from the superannuation system.

Trustees will need the breadth of capabilities to manage the financial and non-financial risks I've touched on today, while also meeting the growing demands associated with supporting many more members through retirement.

That is why building capability and strengthening governance across all APRA-regulated entities, banks, insurers and superannuation trustees, is such an important priority for us.

Governance is not an end in itself. Good governance is ultimately about ensuring that boards have the capabilities, judgement, diversity of perspective and capacity for challenge needed to navigate an increasingly demanding environment.

As you know, APRA has been consulting on our updated governance standard, and we expect to publish the final version by the end of the year.

I know there are strong views in this room about aspects of those proposals, particularly the question of tenure limits.

Let me be clear.

APRA is not questioning the value of equal representation. Nor are we seeking to veto who sits on trustee boards.

But we do believe good governance requires renewal, fresh challenge and the capabilities needed to help trustees confront the high-stakes and rapidly evolving risks they face in today's volatile and uncertain world.

While acknowledging that there will be differences on the precise mechanisms used, I hope there is common ground around the objective of ensuring that boards are well equipped to protect members' interests and steer their organisations through the challenges ahead.

Delivering value to members

Capability, of course, is not simply about who sits around the board table.

It is also about the decisions trustees make about where to invest their resources, the capabilities they build within their organisations, and ultimately how they deliver value to members.

The industry has a solid record of delivering value through investment returns and reduced fees, as detailed in APRA's 2026 Comprehensive Product Performance Package.

These are important achievements, and trustees should continue driving efficiency and value for members.

But delivering value to members is about more than returns and fees.

Trustees also need to invest in cyber security, operational resilience and risk management.

The financial consequences of a major cyber incident, prolonged operational disruption or governance failure could far outweigh the cost of the controls designed to prevent it.

We should therefore be careful not to think about investments in resilience simply as costs. Done well, they are investments in protecting members and preserving the value that the system exists to deliver.

And while APRA wants to see continued uplift in trustee-level capability in managing non-financial risks, we also recognise there is work to be done at a system level.

APRA will continue to use its convening power to bring organisations together to collaborate on cross-industry threats such as cyber and frontier AI, and to learn from the experiences of banks and other financial institutions.

We look forward to working with you and profit-to-member funds, alongside other regulated entities and stakeholders, to improve the system's collective ability to defend itself against these threats.

Strengthening investment governance

The same principle applies to the stewardship of members' investments.

As the superannuation system grows in size and complexity, strong investment governance becomes more important, not less.

Just over a month ago, APRA released a package of proposals to strengthen trustee investment governance and better protect members' retirement savings.

APRA is proposing three new safeguards: member-level investment limits for higher-risk investments; stronger management of investment-related conflicts of interest; and ensuring that investment oversight capabilities are commensurate with the size and complexity of the investment menu.

The reforms would apply to all trustees, but are expected to have the greatest impact on platform trustees.

The collapse of the Shield and First Guardian master funds demonstrates the devastating human consequences that can arise from concentrated exposure to poor or unsuitable investment options.

As you know, these events have led to a number of ongoing investigations, with major actions currently before the courts.

For APRA, there is a clear message arising from these events:

Trustees are ultimately accountable for the products they make available to their members.

We are determined to lift the bar on investment governance through these reforms.

Conclusion

Australia's superannuation system has been a remarkable success in helping working Australians build financial security for retirement.

But that system did not become one of the world's largest retirement savings systems by accident.

It was built through foresight, sustained reform and the contributions of governments, unions, employers, trustees, regulators and many others over more than three decades.

That is something worth recognising and protecting.

But past success should not allow any of us to become complacent.

Our responsibility now is to ensure that the system continues to evolve as the needs of its members and the risks confronting them evolve.

The operating environment trustees face today is more complex, more interconnected and more uncertain than at any point in the system's history.

At the same time, millions more Australians will increasingly rely on superannuation to provide not only savings, but security and dignity throughout their retirement.

Our shared responsibility is to ensure the system remains worthy of the trust Australians have placed in it.

By continuing to strengthen resilience, investment governance and capability, and by working together to address the challenges ahead, we can maintain confidence in the system and ensure that it delivers on its promise, not just for those who have spent their working lives contributing to it, but for generations of Australians to come.

Thank you.

Disclaimer: Curated by HT Syndication.