He told the Future of Super conference this week that a mandatory retirement savings scheme could help avoid the issue of too many people being given bad advice and making poor decisions with their money.
“Investing badly is surprisingly easy,” he said.
Coleman, who works at Motu Economic and Public Policy Research, said it was hard for people to manage their money on their own.
But he said there were a lot of incentives for unscrupulous people to offer bad advice and too many incentives to steal from wealthy elderly people.
“Mandatory schemes force the management of funds into the hands of the professionals.”
Pay-as-you-go super schemes, such as the New Zealand pension system, put high costs on to future generations, he said.
But people tended to save too little to provide for their own retirement and did not invest well what they were able to save. Tax laws meant that there were incentives not to save but to invest in tax-advantaged assets.
Mandatory schemes could be used to correct macroeconomic issues and improve risk diversification, he said.
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