Opposition to ‘life stages’ default funds
Submissions to the government’s review of the default provider system have been mixed on the idea of adjusting default fund members’ asset allocation according to their age.
Supporters include default providers OnePath and Mercer, which said age-based defaults were common in the US and UK and recommended by the OECD as suitable strategies for pension plans.
Fisher Funds also supported this approach, saying that if the Government regards itself as a “de facto investment adviser” then it should act consistently with investment industry best practice.
“In other words, the level of short-term risk and volatility the Government should be willing to impose on default members needs to be in line with that of a best practice investment adviser.”
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