Super Nation is a fortnightly column that examines, explains and analyses key issues in one of Australia's largest, fastest-growing and most important industries: superannuation.
“Pretty extraordinary.”
This was how a superannuation industry figure described the decision of one of Australia’s largest super (pension) funds to effectively lock its 1.05 million members out of A$89 billion (US$57.9 billion) of retirement savings for almost seven weeks.
HESTA (Health Employees Superannuation Trust Australia), the fund established to serve workers in the health and community services sectors, is limiting members' access to a range of services between 18 April and 2 June 2025.
In fact, a small number of members who intended to start an income stream from their super accounts needed to put arrangements in place before 31 March.
This means they cannot withdraw money from or contribute to their accounts, rollover funds, switch investments online, make insurance claims, change their personal or beneficiary details or use their online account or the app.
The reason:
HESTA is changing its member administration services provider from MUFG Retirement Solutions to Grow Super Ops Pty Ltd, in what it called the largest technology project in the fund's 38-year history.
Describing this in a media release on 26 February as a “limited service period” (LSP), HESTA encouraged its members to make any necessary changes to their accounts by the end of March, which gave them just over one month to act.
Members, many of whom are nurses, were also informed about the LSP from late February via a Significant Event Notice (SEN) emailed to about 990,000 members and posted to another 87,000 members.
But as is well known, many Australians do not think about their super until they are nearing retirement or need to make changes urgently as they experience different life events, which may have happened slap bang in the middle of the freeze.
The cut-off date just happened to be a few days before United States President Donald Trump precipitated a plunge in the global share markets (in which Australians’ superannuation is partly invested) with his tornado of tariffs.
The freeze meant members who would have otherwise wanted to respond to these market movements, such as by changing their super investments, were unable to do so.
While tariffs and markets are beyond the fund's control, the timing was poor and even the fund acknowledged it was "challenging".
“In a fast-changing super landscape, the transformation is a significant part of HESTA’s work to deliver more personalised experiences that support members' financial journeys,” HESTA said.
For many HESTA members, they would have found themselves stranded on the side of the retirement road as their ‘journeys’ came to a dead stop.
Record lockout?
If this is not the most extended outage in super fund history, few can recall one that dragged on for longer, but HESTA reckons there have been several LSPs of a similar duration (5-7 weeks).
For example, Australian Ethical Super froze some member services for almost seven weeks in 2024, also as part of a transition to a new super administration provider.
The major regulator in this case, the Australian Prudential Regulation Authority (APRA), declined to comment on what it knew about the service freeze and whether it had approved of members being cut off from these services for such a long period.
But Super Consumers Australia CEO Xavier O’Halloran told Azzet: “My understanding is that APRA has reviewed and signed off on this.”
One long time super industry observer said preventing members from accessing their accounts for six weeks was “pretty extraordinary”.
“Can you imagine if a bank did that?” he said.
“It’s one of those times you would be happy that super members are not that engaged.”
He said that due to their strong long-term performance and lower fees, industry funds like HESTA were more likely to be forgiven for such an outage than retail funds, which had also been the subject of controversy and criticism for poor service.
“If AMP had shut down for six weeks you would be hearing the screams from New Zealand,” the industry observer said.
O’Halloran, whose organisation Super Consumers Australia is effectively a peak body for Australia’s 18 million super members, said: “From a member’s perspective it’s a pretty long period of time. It’s a few weeks longer than what people have typically had, particularly as a time of market volatility.
“What seems to be difficult is setting up an income stream over this time. People looking to retire over this time may struggle.”
An experienced adviser to superannuation funds said it usually took about four weeks, not six weeks, to transfer data in the event of fund mergers.
He said HESTA would have been obliged to inform APRA and ASIC of a materially adverse event like this.
Section 636 of the Superannuation Industry (Supervision) Act 1993 (SIS Act) gives APRA the authority to allow funds to deny the roll over or transfer of members' superannuation if such ‘portability’ is not in members’ best interests or compromises the fund's stability.
Australian Nursing and Midwifery Federation Federal Secretary Annie Butler said: “HESTA has notified us of the changes they’re making to their administration services. Our focus is on our ANMF Members, who’ll have limited services during the transition period. “We’re continuing to engage with HESTA and reporting back to our Members.”
No pain, no gain
HESTA told Azzet income stream payments would continue. Some due in April and early May had been paid early, contributions from employers would be processed at the end of the LSP, but insurance claims were still progressed.
“We’re continuing to support our members through this period of change as we know that, while in the short-term it may be challenging, this transition will provide the technology platform and data capabilities to better service our members in the years ahead,” a HESTA spokesperson said in a statement.
“With complex large-scale technology projects of this nature, it is common to have a planned limited services period. This is a critical phase of the project, designed to ensure the safe and secure transfer of our 1 million-plus members’ accounts.”
“We are confident this project will set us up to deliver better outcomes for members, allowing for more personalised experiences that can make it easier for them to manage their super.”
