Pension fund - Financial definition
Concise definition of the term pension fund
A pension fund is a pool of assets established to pay retirement benefits to employees. It is typically managed by an employer, government, or union, and funded by contributions from both employers and employees.
Comprehensive definition of the term pension fund
Pension funds are critical components of the financial ecosystem, designed to provide financial security to individuals in their retirement years by accumulating and investing funds over an employee's working life. These funds are managed by professional investment managers who invest in a diversified portfolio of assets, including stocks, bonds, real estate, and other financial instruments. Examples of pension funds include public pension funds for government employees, corporate pension plans for private-sector workers, and multi-employer pension plans managed by unions. Market practices involve adhering to regulatory standards, maintaining funding levels, and ensuring the solvency and sustainability of the fund to meet future obligations. Pension funds also play a significant role in the economy by providing substantial capital to financial markets and contributing to economic stability.