Consequences of APRA’s bigger is better mantra

Mike Taylor

Managing Editor and Publisher

2 July 2026

ANALYSIS

For nearly five years the Australian Prudential Regulation Authority (APRA) made clear to Australian superannuation fund trustees and executives its view that scale matters and bigger is better.

APRA’s attitude, aligned with its implementation of first its heat maps and then the superannuation performance test, has seen the number of superannuation funds it regulates more than halved.

Thus, it can hardly evince surprise when a System Risk Stress Testy assessment points to the fact that the actions of a handful of large (mostly industry) superannuation funds may have undue influence in a crisis noting that “Decisions by a small number of large funds could have outsized and more consequential effects across the system”.

Indeed, APRA was proudly boasting the following in December, last year, when it released its annual superannuation bulletin highlights for 2024-25.

Over the five years from June 2020 to June 2025:

• total superannuation industry assets increased by 52.2 per cent from $2.9 trillion to $4.3 trillion (Chart 1);
• assets in APRA-regulated superannuation entities increased by 57.8 per cent from $1.9 trillion to $3.0 trillion; and
• SMSF assets increased by 47.8 per cent from $711 billion to $1.1 trillion.

Over the same period, the number of APRA-regulated funds declined from 1,656 to 771 (53.4 per cent) with the number of APRA-regulated funds with more than six members declining from 158 to 81. In addition, there was a net reduction of 12 pooled superannuation trusts (PSTs) and 796 small APRA funds (six or less members) over the period. The number of SMSFs rose 15.2 per cent from 566,871 to 653,062 over the five years to June 2025.

At 30 June 2025, there were 58 APRA-regulated RSE licensees responsible for managing 81 funds with more than six members. These funds had 22.9 million member accounts.

There were 397 directorships on the boards of APRA-regulated trustees at 30 June 2025, with females accounting for 42.6 per cent of directorships. The average board size was 7  directors, with average director remuneration of $98,809 per annum.

Yes, quite the achievement. Halve the number of superannuation industry and then be somewhat concerned about the creation of risk in the form of the influence now wielded by the what Deloitte is calling the “mega-funds”.

Those mega funds are, by member numbers:

• AustralianSuper
• Australian Retirement Trust
• REST
• Hostplus
• Aware Super
• HESTA
• Mercer Super
• Cbus
• MLC Super Fund
• UniSuper

Those wishing to measure power by assets under management can then add Colonial First State (CFS) to the mix.

A number of the superannuation funds which exited or merged over the past five years were right to do so, but he bottom line, is that the already big have become even bigger.

Further, seven of 10 mega-funds are profit to member (industry) superannuation funds most of which are active investors in Australia’s publicly-listed companies.

APRA’s scale mantra was first voiced by former deputy chair, Helen Rowell (now sitting on the board of Australian Retirement Trust (ART) as chair and then taken up by recently-departed deputy chair, Margaret Cole.

Interestingly, and notwithstanding the reduced number of funds it now regulates, APRA is not costing taxpayers any less.