APRA deputy chair Helen Rowell believes that while the superannuation industry has a lot to be proud of, there's no room for complacency.
Speaking at the Australian Institute of Superannuation Trustees Super Investment Conference, Rowell said now that higher account balances are skewing towards retirees, super funds need to rethink their benefit design and investment strategies.
Funds are also challenged by increasing amounts of benefits being paid out, reducing cashflow.
"If a fund starts experiencing slower growth in assets or members, or negative cashflow, it becomes increasingly difficult to deliver investment outcomes, and risk/return targets may need to be adjusted," she said.
Rowell said she wants trustees to be cognisant of this problem, because "low-performing, high-cost funds are going to hit our radar screen."
Over the coming months, Rowell said APRA will be focusing on multiple different criteria to determine the value of a fund, including expenditure.
"The changing retirement landscape raises a number of implications trustees need to think about," she added.