Target-oriented defined contribution fund

The PPK Act regulates in detail which financial instruments and in what proportions life cycle funds can invest, but nevertheless the scope for decision by the management team will still be very large.

The funds of employees participating in capital plans, which they will use after the age of 60, will be multiplied in defined date funds, also called life cycle funds. For many years, defined date strategies have been meeting retirement needs in developed markets. Until now, due to differing expectations of the regulator, this mechanism has not even been used by open pension funds, although strategies based on the life cycle of participants can fundamentally improve the relationship between the expected rate of return and the level of acceptance of market risk, characteristic of any investment. The time is coming when they will be widely available here as well.

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