Lifecycle funds still require further development before they can be used as MySuper options, a financial risk management firm has said.

Under the Stronger Super reforms, published on Tuesday, superannuation fund trustees will be allowed to use lifecycle funds as their MySuper options.

"Trustees are best placed to decide whether a lifecycle investment option is best suited to their members," Treasury said in its Stronger Super information pack.

"Therefore, the Government has decided that trustees will be allowed to use a lifecycle investment option as the single investment strategy for their MySuper product."

Milliman financial risk management practice leader Wade Matterson is researching the evolution of lifecycle funds.

"I think the proposal is a good one, however, the question remains as to what is an appropriate lifecycle fund," he said.

Matterson point out that in the United States, lifecycle, or target date funds as they are called there, faced a lot of criticism after the global financial crisis, because they endured heavy losses, due to a number of issues including, fees, comparability, conflicts of interest and lack of risk management.

Lifecycle investment options automatically adjust a member's asset allocation to lower risk investments as a member gets older.

The funds can be relevant to members who transition to retirement, but the pace at which the investment mix is changed and the disregard for market movements has caused problems in market downturns.

"Since then there have been a number of improvements to the concept, but there is still lot of work to be done," Matterson said.

The government has announced that the Australian Prudential Regulation Authority will develop guidance for trustees on issues related to the way in which they develop and maintain a lifecycle investment approach for a MySuper product.