Many pension scheme default funds employ ‘lifestyling' strategies - a method which alters asset allocation to mirror risk appetite throughout the member's life. However, current market conditions are stirring up trouble for providers.
Pension providers could face legal challenges from members who have been locked into lifestyle strategies, according to a defined contribution (DC) specialist. Speaking at a Pensions Management Institute seminar, P-Solve head of DC Britt Hoffman said traditional lifestyling strategies had “made sense” when they were first introduced, but were now being “challenged” by market conditions. Hoffman said current lifestyle models – which start to move from equities into bonds and cash about ten years from retirement – make members particularly sensitive to the timing of entry and exit, due ...
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