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Introduction

Definition

Pension Funds are special type of Investment Funds set up for various pension plans. A Pension Plan is a qualified retirement plan set up by a corporation, labor union, government, or other organizations, for its employees.
Various types of Pension Plans are - profit-sharing plans, stock bonus, and Employee Stock Ownership Plans, thrift plans, target benefit plans, money purchase plans, and defined benefit plans, etc.

The primary objective of Pension Funds is to accumulate sufficient assets, through contributions and investment income, to satisfy all pension obligations of the contributors on a timely basis.

With life expectancy going up and the number of retirees rising in India and throughout the globe, the importance of Pension Funds and the potential for its success has been increasing largely.

Growing Importance of PF in the World Scenario

According to figures provided by Confederation of Indian Industry (CII), Japan tops the list with life expectancy of 79 years followed by USA 77 years, UK 76 years, Argentina and Sri Lanka 72 years each, Africa and Russia 64 years each and India 62 years.

By 2010, it is estimated that 30 per cent of Japan, 25 per cent of Italy, 25 per cent of Germany, 23 per cent of UK and 20 per cent of the US, Canada and Russia will be over the age of 60.

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* Contributed by -
Arpit Bhadani & Ashwani Gupta,
PGDBM 2006,
IMT, Ghaziabad.