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Risk Management Issues for Mandatory Private Retirement Provision: Roles for Options

Author

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  • Hazel Bateman

    (School of Economics, The University of New South Wales, Sydney NSW 2052; E†mail: h.bateman@unsw.edu.au)

Abstract

Following the introduction of mandatory superannuation provision in Australia, superannuation fund managers and trustees are faced with the conflicting objectives of high returns and minimal year†on†year volatility. This paper investigates whether repeat portfolio insurance implemented over the working life time of superannuation saving can offer a solution. Stochastic simulations show that the options†based strategies perfor M well in comparison to traditional investment practices. Strategies combining protective puts with age phasing produce the most appealing results.

Suggested Citation

  • Hazel Bateman, 1997. "Risk Management Issues for Mandatory Private Retirement Provision: Roles for Options," Australian Journal of Management, Australian School of Business, vol. 22(2), pages 175-197, December.
    • Handle: RePEc:sae:ausman:v:22:y:1997:i:2:p:175-197
    DOI: 10.1177/031289629702200203
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    References listed on IDEAS

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    7. Bateman, H., 1995. "Risk Management Issues foe Mandatory Private Retirement Provision: Roles for Options," Papers 95/17, New South Wales - School of Economics.
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    Cited by:

    1. Geoffrey Kingston & Lance Fisher, 2014. "Down the Retirement Risk Zone with Gun and Camera," Economic Papers, The Economic Society of Australia, vol. 33(2), pages 153-162, June.

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