The superannuation industry is facing a retirement outcome challenge, which is driving the need to develop products, strategies and solutions that better reflect members’ objectives and preferences.
The Member’s Default Utility Function Version 1 (or MDUFv1) is an open-architecture metric to assist the industry to design retirement outcome solutions.
MDUFv1 was developed by a panel of academics and industry professionals with over 200 years of combined, relevant experience.
The panel determined an appropriate and sensible set of objectives for trustees to assume on behalf of their default fund members, and converted these preferences into a mathematical function – the MDUFv1.
Below is a range of resources on MDUFv1. These include presentations, technical papers and Excel-based models.
|A short introduction to MDUF v1||A short introductory flyer.||David Bell||DOWNLOAD RESOURCE|
|An introduction to MDUF v1||A longer introductory paper which provides broad background on MDUF v1, namely its creation and applications.||David Bell, Estelle Liu, Adam Shao||DOWNLOAD RESOURCE|
|Panel biographies||Biographies of all panel members.||–||DOWNLOAD RESOURCE|
|Introductory presentation||An introductory presentation which provides broad background on MDUF v1, namely its creation and applications.||David Bell, Estelle Liu, Adam Shao||DOWNLOAD RESOURCE|
|Technical paper 1: MDUF v1 – Derivation||A paper detailing in steps the derivation of MDUF v1. This paper is reasonably complex.||Estelle Liu, Adam Shao, David Bell||DOWNLOAD RESOURCE|
|Technical paper 2: MDUF v1 – Static Models||Uses MDUF v1 to compare static retirement product solutions (static solutions involve a set of pre-determined rules applied throughout retirement regardless of situation). This paper accompanies the Excel Model. This paper is reasonably complex.||Adam Shao, Estelle Liu, David Bell||DOWNLOAD RESOURCE|
|Technical paper 3: MDUF v1 – Optimal Dynamic Strategies||Uses MDUF v1 to derive optimal retirement solutions – candidate products include Allocated pension, life annuities as well as the Age Pension. Alternative measurements (Certainty Equivalent Consumption, Wealth Gap and Extra Annual Return) are calculated. This paper is highly complex.||Adam Shao, Estelle Liu, David Bell||DOWNLOAD RESOURCE|
|Excel model||This model simulates outcomes and estimates utility for four different static retirement outcome solutions. Longevity and investment outcomes are modelled stochastically and the Age Pension is incorporated. This model is reasonably complex.||Estelle Liu, Adam Shao, David Bell||DOWNLOAD RESOURCE|
|Working paper||This paper is a document of record for MDUF v1. It records background and objectives of the project and then works through a proposed design solutions for MDUF v1. This paper captures the essence of a number of important debates amongst the Panel. A worked case study (the same as that presented in Technical Paper 3) is included. This paper is maintained in a working paper format and so is not ‘polished’.||Estelle Liu, Adam Shao, David Bell||DOWNLOAD RESOURCE|
|MDUF v1 – Questions and Answers||A large collection of questions and answers regarding MDUF v1.||David Bell, Estelle Liu, Adam Shao||DOWNLOAD RESOURCE|
For any queries on the material contained within, please contact the MDUF team at: firstname.lastname@example.org