Smart defaults: Determining the number of default funds in a pension scheme
| Autor: | Ian Tonks, Alistair Haig, David Blake, Laura MacPhee, Mel Duffield, Dean Blower |
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| Rok vydání: | 2021 |
| Předmět: |
Scheme (programming language)
Pension History Actuarial science Polymers and Plastics Risk aversion Principal (computer security) Age cohorts HG Industrial and Manufacturing Engineering Accounting Default Business Ethical investment Business and International Management computer Investment fund computer.programming_language |
| Zdroj: | SSRN Electronic Journal. |
| ISSN: | 1556-5068 0890-8389 |
| DOI: | 10.2139/ssrn.4008575 |
| Popis: | We propose a new methodology for the smart design of the default investment fund(s) in occupational defined contribution pension schemes based on the observable characteristics of scheme members. Using a unique dataset of member risk attitudes and characteristics from a survey of a large UK pension scheme, we apply factor analysis to identify single factors for risk aversion, risk capacity and ethical investment preferences, and then apply cluster analysis to these factors to identify two distinct groups of members across age cohorts. We find membership of these clusters depends on a number of personal characteristics, with the principal differentiating feature being that one group had previously engaged with the pension scheme, while the other had not. These identified characteristics can be utilised in the design of smart default funds, including appropriate engagement strategies. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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