Rest Super Faces Concerns Over Internal Risk Culture

Rest Super is working to strengthen its internal governance and meet new regulatory requirements. However, dissatisfaction within its investment risk team may hinder these efforts. Nearly half the team is considering leaving, raising concerns about the fund’s oversight and stability. Rest Super manages $93 billion and serves more than 2 million Australians.

This situation unfolds as Australia’s $4.2 trillion superannuation sector faces rising pressure from regulators to manage both investment performance and non-financial risks. These include cyberattacks, service provider failures and delays in member payouts. Rest has already drawn regulatory attention for its slow processing of death benefit claims, which led to the launch of an internal improvement program called Project Scarlet.

A February staff survey showed that only 56% of Rest’s investment governance team felt engaged at work. This figure had dropped by 15 percentage points over an eight-month period. Less than one in three employees believed risk management roles were clearly defined within the organisation. Only four out of 17 team members agreed that the “three lines of defence” risk model was effectively in place. Over half the team said they regularly thought about leaving and only 36% saw opportunities for career advancement within the fund.

Rest has downplayed the survey's significance, saying it reflects the views of just one team and does not represent overall workplace culture. Still, the fund has made changes including a restructure of its risk department earlier this year. It also launched Project Helix to prepare for new APRA rules under CPS230 that will require stronger management of third-party risks. Rest currently works with close to 50 external suppliers.

Regulatory scrutiny is not limited to internal governance. The Australian Securities and Investments Commission is taking legal action against several funds over payout delays, while APRA has conducted on-site visits to funds like Rest to ensure they are making progress. Recent cyberattacks have intensified concerns across the sector. Although Rest’s April data breach did not result in financial losses for members, it caused widespread fear and disrupted its digital services.

The superannuation industry is likely to face continued pressure for improved controls and higher employee engagement. Rest’s internal feedback suggests that improving risk and operational performance may depend as much on staff morale as on formal compliance.

Source: Australian Financial Review, Rest