23-05-2025
HESTA members remain locked out of accounts as consumer group calls for more transparency
Daniella Paidi received a distressed call from a client who realised he was at risk of losing his home deposit after being unable to access his superannuation.
Her client — a man from regional Victoria — is a member of HESTA, which has been mostly offline since April in a planned seven-week outage.
Property lawyer Ms Paidi said her client was just days away from losing his deposit of $28,200 after missing his property settlement date.
"Because of this upgrade he's been caught out, and he's now having to deal with the emotional and financial burden," she told ABC News.
HESTA's seven-week outage, to change administration provider, left more than 1 million Australians unable to access their retirement funds, except for in exceptional circumstances.
Ms Paidi said her client was aware of the outage but didn't realise the extent of what it meant for him and his ability to access his funds.
She said it wasn't until she stepped in to support that he did realise.
"We reached out to HESTA and we couldn't get on to anybody, we didn't receive a timely response or any kind of clear communication," she told The Business.
"There was the opportunity to leave an online inquiry and to make a complaint, and we used both avenues really just to get somebody to speak to."
Ms Paidi said someone in her network was able to put her in contact with HESTA, and 80 per cent of funds were deposited into her clients account on May 14.
Earlier this week, the remaining 20 per cent landed in his account and his property was settled on Tuesday.
A spokesperson for HESTA told ABC News: "Our contact centre and member engagement teams are actively supporting members with their queries.
"While there are temporary disruptions to some services, it's important to note that members can still receive urgent and critical payments, and switch investments during the limited services period."
But Ms Paidi said too much damage has already been done.
"The focus for HESTA going forward, [has to be] really looking at this situation and thinking okay we are entrusted with acting in the best interests of these clients, of our people.
"I think the question should be: 'Have we acted in the best interest of our clients here, and how can we do things better in the future?'"
Decades-long HESTA member Annette Mumford said she was also caught out by the freeze.
"I find it very distressing and I'm just gobsmacked that they have not even notified their customers."
However, the superannuation fund said it did inform its members back in February via email, its website, and in some cases, a letter in the mail.
Despite this, dozens of HESTA members have continued to tell the ABC they didn't find out about the outage until our report in April.
Ms Mumford said she's transitioning to retirement and the situation left her stressed.
"I was so distressed thinking 'oh my gosh', because there's no time for planning because it had already closed down without me knowing in advance."
She said she called HESTA and put in a formal complaint.
Despite alerting customers earlier in the year, Super Consumers Australia chief executive Xavier O'Halloran argued HESTA should have gone above and beyond with its communication.
"They should be making the effort to call people and let them know that they are going to be subject to this period of time where they won't be able to access their money, and what they can do to mitigate against any harm that might cause."
The Australian Prudential Regulation Authority (APRA) is the independent statutory authority that governs most superannuation funds, including the approval of planned outages.
A spokesperson for APRA told ABC News the regulator doesn't comment on entity specific matters and also wouldn't comment on questions more broadly.
Consumer advocates condemned the industry regulator for not being open with members about the process for approving an almost two-month outage by one of Australia's major super funds.
Mr O'Halloran said transparency from the regulator around these kinds of approvals is "really important".
APRA regulates 1,790 financial institutions and according to its website, is "concerned with maintaining the safety and soundness of financial institutions, so that the community can have confidence that they will meet their financial commitments under all reasonable circumstances".
Mr O'Halloran said APRA's refusal to comment makes it hard to know what the approval processes look like.
He said in comparison, situations involving the Australian Securities Investment Commission (ASIC), make processes and the reasons for approving those processes available to the public.
In 2020, ASIC told the public it was granting "relief to industry to provide affordable and timely financial advice during the COVID-19 pandemic".
"From my perspective, [ASIC is] far more transparent, makes the case for why relief was needed and placed some conditions on its use to minimise consumer harm," Mr O'Halloran told the ABC.
He thinks APRA should do the same.
Whitley Bejah, a personal finance researcher at Griffith University, isn't in favour of a blanket need for transparency from APRA around outages, but says the HESTA outage is an exceptional case.
"If it's a small outage, I would say [no transparency is needed from APRA], but due to the large time frame associated with the HESTA outage, I would think having something small on [APRA's] website could be useful for Australians who did not receive the trustee's correspondence," she said.
But ultimately, she said the responsibility lies with the super fund.
"I think APRA has enough to worry about … it's up to the trustee to inform the members well ahead of time so that people can plan ahead."
Despite alerting customers at the end of February, Ms Bejah argued more notice was necessary from HESTA, particularly from those relying on their super as part of the First Home Super Saver Scheme.
"I'm not convinced HESTA gave enough time for members to prepare for the planned outage."
