diff --git a/resources/manifests/kube-controller-manager.yaml b/resources/manifests/kube-controller-manager.yaml
index dbee0a81..860fcd44 100644
--- a/resources/manifests/kube-controller-manager.yaml
+++ b/resources/manifests/kube-controller-manager.yaml
@@ -42,6 +42,7 @@ spec:
         - controller-manager
         - --use-service-account-credentials
         - --allocate-node-cidrs=true
+        - --authentication-skip-lookup
         - --cloud-provider=${cloud_provider}
         - --cluster-cidr=${pod_cidr}
         - --service-cluster-ip-range=${service_cidr}
@@ -57,6 +58,8 @@ spec:
           initialDelaySeconds: 15
           timeoutSeconds: 15
         volumeMounts:
+        - name: var-run-kubernetes
+          mountPath: /var/run/kubernetes
         - name: secrets
           mountPath: /etc/kubernetes/secrets
           readOnly: true
@@ -77,6 +80,8 @@ spec:
         operator: Exists
         effect: NoSchedule
       volumes:
+      - name: var-run-kubernetes
+        emptyDir: {}
       - name: secrets
         secret:
           secretName: kube-controller-manager
diff --git a/variables.tf b/variables.tf
index eb85f8a4..12689298 100644
--- a/variables.tf
+++ b/variables.tf
@@ -73,7 +73,7 @@ variable "container_images" {
     calico_cni       = "quay.io/calico/cni:v3.2.1"
     flannel          = "quay.io/coreos/flannel:v0.10.0-amd64"
     flannel_cni      = "quay.io/coreos/flannel-cni:v0.3.0"
-    hyperkube        = "k8s.gcr.io/hyperkube:v1.11.3"
+    hyperkube        = "k8s.gcr.io/hyperkube:v1.12.0-rc.2"
     coredns          = "k8s.gcr.io/coredns:1.2.2"
     pod_checkpointer = "quay.io/coreos/pod-checkpointer:9dc83e1ab3bc36ca25c9f7c18ddef1b91d4a0558"
   }