Retirement savings investment choices in response to the global financial crisis: Australian evidence

This paper examines the retirement savings investment choices of Australian workers over a three-year period, including the global financial crisis (GFC), based on a large sample of members drawn from five superannuation funds. The overwhelming majority of members did not change their investment strategy in response to the GFC. Between October 2006 and March 2009 less than seven per cent of members did so. The likelihood of making a change increased with member balance and contributions levels. During the GFC period women with large balances were more likely to make a change, a result which contrasts with the bulk of prior evidence suggesting males as the more active. The level of change activity did increase during the GFC peaking in October 2008, the month with the largest market downturn, and March 2009, when the market reached its low point. The implications for both members and funds of the observed investment choice behaviour are discussed.