A framework for designing investment strategies for default retirement plans

Edwin Lung; Craig Roodt; Laura Ryan; Geoffrey J. Warren; Kirsten Wymer

doi:10.3905/JOR.2020.1.081

A framework for designing investment strategies for default retirement plans

Edwin Lung, Craig Roodt, Laura Ryan, Geoffrey J. Warren, Kirsten Wymer

Research output: Contribution to journal › Article › peer-review

1 Citation (Scopus)

Abstract

We identify and discuss four key elements to address when designing the investment strategy for default retirement plans: whether to cater for member needs or their wants, objectives, the member for which the default is being designed, and risk appetite. Addressing these design elements requires making assumptions about the member, of which the literature provides limited guidance to plan sponsors. We outline the main assumptions and demonstrate the potential impact on retirement experience through illustrative models. We find that mismatches between the member and the way that they are characterized can adversely impact on welfare.

Original language	English
Pages (from-to)	40-60
Number of pages	21
Journal	Journal of Retirement
Volume	8
Issue number	3
DOIs	https://doi.org/10.3905/JOR.2020.1.081
Publication status	Published - Dec 2021

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10.3905/JOR.2020.1.081

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A framework for designing investment strategies for default retirement plans

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