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One size fits all: How many default funds does a pension scheme need?

Blake, D. ORCID: 0000-0002-2453-2090, Duffield, M., Tonks, I. , Haig, A., Blower, D. & MacPhee, L. (2020). One size fits all: How many default funds does a pension scheme need?. London, UK: Pensions Institute.


In this paper, we analyse the number of default investment funds appropriate for an occupational defined contribution pension scheme. Using a unique dataset of member risk attitudes and characteristics from a survey of a large UK pension scheme, we apply cluster analysis to identify two distinct groups of members in their 40s and 50s. Further analysis indicated that the risk attitudes of the two groups were not significantly different, allowing us to conclude that a single lifestyle default fund is appropriate.

Publication Type: Monograph (Working Paper)
Additional Information: investment choices, cluster analysis, risk attitudes, risk capacity, defined contribution pension schemes
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HG Finance
Departments: Bayes Business School > Finance
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