Does the AE Bill envisage only one default fund?

[Duke of Marmalade]

This is what the Heads of Bill says about the Default fund:

Design of the default fund
Provide that -
(1) The CPA shall prepare a default investment strategy and shall provide a default fund for the investment of contributions
...
(d) that the default fund will take into account the age profile of participants within its risk parameters.

There is more detail in Head 38 but again pointing to just one default fund.
This is at odds with the NEST approach in the UK which has over 40 retirement date target funds as the default funds.
Now I understand that one leading provider of PRSAs uses a Risk Category 4 as its default ARF at retirement. Could that fund be suitable for anyone at any age? I have an open mind on that.

 

[Brendan Burgess]

Hi Duke

I suspect that it's just sloppy wording.

The guys in Social Welfare think that "lifestyling" is a good idea. Therefore, they want default funds for different ages.

Brendan

 

[Duke of Marmalade]

Hi Duke

I suspect that it's just sloppy wording.

The guys in Social Welfare think that "lifestyling" is a good idea. Therefore, they want default funds for different ages.

Brendan

Yes Boss that was my first thought. I see it as one of three possibilities:
1) (very) sloppy wording which will be fixed - I still think this might be the case but am less certain. I have seen draft legislative texts before and they tend to be very precise and I have never seen them this sloppy.
2) whilst it looks sloppy to our lay eyes the wording does actually allow for target date funds through some convoluted legal interpretation. I have asked several people and no-one can make this sense of it.
3) they actually do mean that there will only be one default fund: this is the one that the wording actually says and it is backed up by the explanatory note which definitely envisages only one fund. That is why I ask the question - could this be their intent? I also do not think that it is totally off the wall.

Has the DSP actually ever given any sense of what they mean by the default fund? Have they indicated that they will be mimicking NEST?