ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Pension funds are pooled monetary contributions from pension plans set up by employers, unions, or other organizations to provide for their employees’ or members’ retirement benefits. Pension funds are the largest investment blocks in most countries and dominate the stock markets where they invest.

Detailed explanation-2: -For example, the nation’s largest pension plan, the California Public Employees’ Retirement System (CalPERS), pays 2% per year in many instances. 5 In that case, an employee with 35 years of service and an average salary of $50, 000 could receive $35, 000 annually.

Detailed explanation-3: -Pension funds are financial intermediaries which offer social insurance by providing income to the insured persons following their retirement. Often they also provide death and disability benefits.

Detailed explanation-4: -Pension funds are pools of savings accumulated during the working life of individuals. At any given point in time, they are the sum of the flow of the employer and employee contributions, investment income, and eventual benefits paid.