The Australian Prudential Regulation Authority and the Australian Securities and Investments Commission have published notes from two joint Superannuation CEO Roundtables that brought together 12 superannuation chief executives to discuss APRA’s inaugural System Risk Stress Test and broader system-wide risks. The notes show a focus on how the superannuation sector’s growing scale and interconnectedness can affect financial stability, with the stress test indicating that funds can help stabilise markets in stress events but may also amplify shocks through their responses to liquidity pressure and market conditions. APRA’s stress test modelled shock transmission across the financial system under a severe, multi-dimensional scenario and involved four large banks and six large superannuation funds. Participants agreed the exercise was exploratory rather than a solvency test, and highlighted liquidity management, illiquid assets and changing member demographics as key considerations for future stress events. The notes also identify operational resilience as a major theme, particularly reliance on material third-party providers such as custodians, administrators, and payment, clearing and settlement systems. APRA and ASIC emphasised that trustees need to strengthen resilience across those supply chains, while CEOs also pointed to governance, outsourced versus internal investment models, risks from less regulated parts of the system, and safeguards around fraud, scams and high-risk switching activity. The discussion pointed to further work on stress testing for the sector. CEOs suggested future exercises could use more targeted scenarios focused on critical risks to improve comparability of responses, and participants agreed on the need to keep building industry capability for complex and multidimensional crises.

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