ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Pension funds, which are also known as retirement funds, is a kind of savings scheme where you (as an employee) invest a small portion of your income/salary into a designated savings plan. The main objective of this plan is to get a steady flow of income after you complete your active years of service.

Detailed explanation-2: -A pension fund represents an institutional investor and invests large pools of money into private and public companies. Pension funds are typically managed by companies (employers).

Detailed explanation-3: -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-4: -The minimum eligibility period for receipt of pension is 10 years. A Central Government servant retiring in accordance with the Pension Rules is entitled to receive pension on completion of at least 10 years of qualifying service.

Detailed explanation-5: -Retiring Pension: A retiring pension shall be granted to a Government servant who retires, or is retired before attaining the age of Superannuation or to a Government servant who, on being declared surplus opts, for voluntary retirement.