The article discusses how pension funds in Australia are supervised based on their level of risk. A more advanced risk-rating model called PAIRS/SOARS was developed in 1992 to assess pension funds more effectively. This model helps regulators identify high-risk funds and allocate resources accordingly. Techniques from the banking industry were adapted for pension funds to improve supervision. The approach enhances risk assessment, strengthens the connection between risk assessment and regulatory actions, and allows for better allocation of supervisory resources.