Australian Retirement Trust (ART) plans to move 1.4m members[1] under 50 invested in the MySuper option from balanced to high-growth. The MySuper default option is chosen for members if members do not elect an asset allocation strategy. It is mostly the balanced option. Whilst a good initiative from ART, it should be mandated by the government as part of its MySuper policy as it would be a better fit-for-purpose policy as we have previously argued[2]. This is especially true for the younger demographic who are decades away from retirement and more disengaged from super decisions. Our age-based switching strategy suggestion (listed below) is not far from what was suggested by ART, except for the balance to conservative section, which ART did not elect to pursue. We still think that going from balance to conservative has its advantages from a portfolio stabilization perspective, especially during the retirement phase of life when pension payment stability/ability takes precedence over accumulation.
| Age Range | Asset Allocation Choices |
| Below 55 | Growth |
| Between 55 and 70 | Balance |
| Over 70 | Conservative |
Furthermore, a government mandate age switching would preserve the homogeneity of the MySuper option, allowing for better apples-to-apples comparisons for the consumer. Perhaps an industry norm will develop going forward.
[1] This represents 8% of the working-age population in Australia.
[2] https://bambootrading.com.au/aged-based-asset-allocation-strategy/