Superannuation fund HESTA is freezing services in planned outage, leaving members without access

Members of superannuation fund HESTA will be unable to move their money until June, in a planned outage affecting more than 1 million Australians.

The industry super fund is changing its administration provider and first notified members of the move in February, but consumer advocates warn many will likely be caught out by the freeze on funds.

“I expect there will be a large number of consumers that will find out for the first time that they can’t access their service when they go to access them over the next seven weeks,” Xavier O’Halloran, director of Super Consumers Australia, told ABC News.

“There’s been information on their website and the media release, but I think where consumers are likely to be let down here is that we know superannuation funds often fail to keep up-to-date contact information on their members,” Mr O’Halloran said.

“And so have a really hard time in contacting them directly with relevant messages like this one.”

Half a dozen HESTA members contacted ABC News with concerns, some noting they had struggled to contact HESTA or withdraw funds leading up to the outage.

Barbara Byng, who is living off regular superannuation withdrawals, said taking money from her superannuation account at the end of last month ahead of the freeze was “enormously stressful.”

The retiree from Sydney said her funds arrived into her account late, after it took her three days to get through to an operator.

“I know they’re about to go offline … I was just more stressed about my money and also about whether my money was safe.”

She believes this was because lots of HESTA users were trying to withdraw money before the shutdown period.

“Why [didn’t they] anticipate this when they’re going offline for seven weeks?”

Ms Byng said being unable to access her account for seven weeks was worrying.

Withdrawals, investment changes and claims unavailable

HESTA manages the funds of 1.05 million people, worth $88 billion, but from earlier this week members have been unable to access most services, including online accounts.

Super contributions and investment switches won’t be processed until June, and withdrawals and claims are also unavailable until then.

Insurance claims, including death, terminal illness, total and permanent disability and income protection, will not be actioned until service resumes, unless they had already commenced, the HESTA website states.

Given the recent cyber attacks on funds, including AustralianSuper, and share market volatility after tariff announcements, Mr O’Halloran said “people are rightly worried”.

“But I’d also urge a bit of caution around times of market volatility, about making big switches.”

The outage is because HESTA is transferring its member account services over to a new provider, GROW Inc.

When announcing the change in late February, chief executive Debby Blakely described it as “the largest technology project in HESTA’s 38-year history”.

A HESTA spokesperson said income stream payments falling in April or May will be paid early, and regular payment schedules will resume from mid-May.

Only urgent payments may be processed, with lump sum payments of up to 80 per cent of balances able to be made.

“The safety and security of members’ accounts is paramount as we transition to a new provider of administration services,” the spokesperson for the fund said.

“Shifting to this new technology platform brings the opportunity to develop more personalised experiences for members, making it easier for them to manage their super.

Super funds accused of underinvesting in services

While HESTA said it is changing administrator providers to improve services for members, Mr O’Halloran said it reflects “a real underinvestment in services.”

“These kinds of delays are due to a lack of strategic vision about what superannuation funds are there to deliver, and that’s good customer service to consumers,” he said.

In March, the Australian Securities and Investment Commission (ASIC)  issued a rebuke of the superannuation sector’s handling of death benefit payouts.

The corporate watchdog called on funds to overhaul the way they deal with claims, noting excessive delays, poor customer service and ineffective claims handling.

ASIC’s review covered 10 funds, including HESTA, which are collectively responsible for 38 per cent of all member benefits in superannuation funds regulated by the Australian Prudential Regulation Authority. It excluded industry giants AustralianSuper and Cbus due to ongoing legal action.

Earlier this month, a number of Australian superannuation funds were hit with suspected cyber attacks, with members of one fund losing $500,000 between them in retirement savings.

Hostplus, Rest, AustralianSuper and Australian Retirement Trust are among the providers targeted.

AustralianSuper was questioned by its own clients about a security weakness in its accounts before cybercriminals stole hundreds of thousands of dollars in retirement savings.

Customers told ABC News they had asked for multi-factor authentication (MFA) on their accounts but were rebuffed — one of them just weeks before the cyber attacks.

The Financial Services Council, the industry peak body that develops standards, is recommending mandating MFA systems for superannuation companies by July 2026.

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