The question of how money saved for retirement should be invested at retirement is up for debate. In the US, the Securities and Exchange Commission and Department of Labor held hearings last week on target date funds, widely used as default funds in US retirement savings plans.

In the UK, the Personal Accounts Delivery Authority is consulting on the investment approach it should adopt for the default fund under the scheme, due to be rolled out from 2012, and on how retirement income should be delivered. This feeds into a wider debate about constructing default funds for DC plans that are “fit for purpose”.