POWERED BY MOMENTUM MEDIA
Third gen DC plans to emerge in 5-10 years
Coverage, adequacy, technology, a lack of trust and lack of engagement with participants are the challenges that need to be addressed in defined contribution (DC) systems, according to new research from the Thinking Ahead Institute (TAI).
The research argued a DC ‘version 2.0’ was emerging with plans for a version 3.0 behind it, which would be characterised by hyper-customisation and integrated whole-of-life wealth management.
It argued the system needed to move beyond its role as a tax-effective savings vehicle and needed to be better customised to individuals, more cost-effective, better governed and more tech-savvy.
Bob Collie, head of research at TAI, said the need for change had been clear for a long time in the industry.
“Even 10 years ago, we were talking of a version 2.0 of DC that was built around the purpose of providing income throughout retirement,” Collie said.
“It’s only recently that real progress has started to be made on that front. But momentum has been building, and we expect to see things develop much more quickly from here.”
The research was based on the findings of a survey and interviews of 10 leading DC organisations, which covered organisations’ mission, operations, governance, investment, member engagement, retirement income strategies and sustainability.
The research also found despite the DC market being driven by local considerations, global themes emerged including the focus on retirement income, the drive to scale and a definition of the role of employers.
Recommended for you
The lower outlook for inflation has set the stage for another two rate cuts over the first half of 2026, according to Westpac.
With private asset valuations emerging as a key concern for both regulators and the broader market, Apollo Global Management has called on the corporate regulator to issue clear principles on valuation practices, including guidance on the disclosures it expects from market participants.
Institutional asset owners are largely rethinking their exposure to the US, with private markets increasingly being viewed as a strategic investment allocation, new research has shown.
Australia’s corporate regulator has been told it must quickly modernise its oversight of private markets, after being caught off guard by the complexity, size, and opacity of the asset class now dominating institutional portfolios.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
92.15 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
53.24 3 y p.a(%)
3
Global X GlobalX FANG+ ETF
43.15 3 y p.a(%)
4
DomaCom Shoreline North Coogee
36.26 3 y p.a(%)
5
GAM LSA Private Shares AU I
35.87 3 y p.a(%)
