Superannuation funds have called for a heightened focus on long-term investment timeframes at the Centre for Investor Education's (CIE) Major Market Players forum.
Participants of the forum, representing $525 billion in super assets under management, said the industry needed to move away from peer group performance measures in the best interest of their members.
"The consensus amongst participants was that superannuation funds should be setting their allocations with members' long-term objectives in mind in order to maximise account balances pre- and during drawdown," Qantas Superannuation chair Anne Ward said.
She said this was especially important in the post-retirement phase, when members were drawing down their balances, making it more difficult to recover from market downturns.
"A focus on long-term outcomes remains critical in the drawdown phase, where the risk of negative returns, loss of capital and absolute volatility carry even greater consequences for members," she said.
The focus on long-term outcomes was one of five key issues that the super industry is facing, participants said.
Other issues included changing member demographics, the need for suitable post-retirement solutions, the need to redefine risk, both market and regulatory risk, and currency management in the current volatile markets.
Recently, a number of fund managers have questioned whether the use of standard deviations from the average return of an asset class is a suitable measure of risk.
Participants of the forum agreed that permanent loss of capital was the most representative definition of risk.
But CIE director Jamie Nemtsas said that funds should determine the most appropriate measures for their own member base.
"Funds need to focus on their own objectives, risk parameters, performance and member protection, and not focus on peer group performance," he said.
