Premium
APPARENTLY CONTRADICTORY SUPERANNUATION CHOICES AMONG YOUNGER FUND MEMBERS: A MISUNDERSTANDING OF RISK?
Author(s) -
ClarkMurphy Marilyn,
Gerrans Paul
Publication year - 2004
Publication title -
economic papers: a journal of applied economics and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.245
H-Index - 19
eISSN - 1759-3441
pISSN - 0812-0439
DOI - 10.1111/j.1759-3441.2004.tb00357.x
Subject(s) - chose , actuarial science , sample (material) , investment (military) , risk–return spectrum , business , economics , finance , political science , portfolio , chemistry , chromatography , politics , law
This paper reports on a survey of fund members who were simultaneously given a particular and restricted choice of fund, between an existing defined benefit fund (DBF) or a new defined contribution fund (DCF), and investment choice within the DCF. A significant sub‐group, including relatively young employees, chose to move from the DBF to the DCF and then chose one of the lowest risk/return investment options available. We find that, compared to the whole sample, this sub‐group of young risk‐avoiders have a higher proportion of female and single respondents, have limited knowledge of super annuation, and are more concerned with risk. There also appears to be significant misunderstanding of the relative risk/return profiles of the DBF and DCF schemes.