ASIC flags gaps in super fund valuations

ASIC has called for stronger scrutiny of unlisted investments after finding persistent weakness in how some superannuation funds and auditors assess asset valuations, raising concerns about the accuracy of members' retirement balances.

The regulators latest review examined 42 registrable superannuation entity financial reports and six audits, identifying shortcomings in trustees' oversight of externally managed investments and auditors' testing of valuation methods and assumptions.

In its report, Accounting for your super: Super fund financial reporting and audit 2025-26, ASIC said some trustees relied heavily on external fund managers for valuations, limiting their ability to challenge the assumptions underpinning reported asset values.

ASIC commissioner Kate O'Rourke said accurate valuations were critical to protecting members' retirement outcomes.

"Getting valuations right matters. Accurate investment valuations are particularly important as they directly affect members' account balances, reported investment returns, fees charged and therefore retirement outcomes," O'Rourke said.

The review also found some trustees did not update member liabilities promptly following significant investment write-downs. Disclosures explaining fair value assessments often lacked detail on the techniques, inputs and judgements used, making it difficult for members to understand how values were determined.

Auditors were also criticised for failing to adequately test prices supplies by external fund managers or obtain sufficient evidence supporting internally managed investment valuations.

O'Rourke said trustees remained responsible for ensuring investments were valued reliably even when external managers were involved.

"Trustees cannot outsource responsibility for ensuring investment valuations are accurate and reliable, even where external fund managers are involved," O'Rourke said.

The findings come as Australia's superannuation assets have grown to nearly $4.8 trillion, more than doubling over the past decade.

ASIC will expand its surveillance program in 2026-2027 to include managed investment schemes, reviewing 20 super funds and 20 schemes, alongside four audit surveillances in each category.

The regulators said it would consider regulatory or enforcement action where significant breaches are identified, warning trustees and auditors must address the ongoing deficiencies to ensure members' balances reflect reliable valuations.