Investing and Global Finance News

Understanding Pension Funds

 

 

A pension fund is created by one’s employer for the purposes of the employee’s investment retirement funds to which they both contribute.  Each month the employee is paid, a certain percentage of the salary goes into the pension fund, with an additional sum provided by the employer.  These make very good terms for the employee; it is a great benefit.  What this is known as is a common asset pool which seeks to generate long-term solid growth as well as providing the workers with a good pension for when they leave the job (i.e., retire).  Usually such a fund is set up by an intermediary (not the employer or the employee) which makes things easier for everyone.  But if the company is like a very large corporation this intermediary may be in-house.  Pension funds are likely the biggest institutional investors in most western countries.

 

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