2016 marks the 10-year anniversary of the Pension Protection Act, landmark legislation that allowed auto enrollment and the use of target-date or risk-based funds as default investments in DC (defined contribution) plans. As we look to the future of DC plans in America, it is helpful to consider the world’s most established DC system — Australia’s.

Australia’s DC system is smaller than America’s in absolute terms, but larger as a percentage of gross domestic product (104 percent versus 73 percent). Australia transitioned relatively quickly from traditional pensions to a DC system in the late 1980s, and compulsory contributions were instituted in 1992. One benefit of the relatively swift transition from DB (defined benefit) to DC as the primary retirement vehicle in Australia was the continuity of the investment teams overseeing the assets. As a greater percentage of DC assets migrate to target-date funds in the U.S. (Cerulli predicts 35 perce