Part - I

"Old age is the most unexpected of all things that happen to man."

- Leon Trotsky

An average Indian lives by this adage and believes that one must always make provision for the future especially old age. The hangover of the "welfare state" looms still and this explains the prime importance given to provident fund and pensions. However, where pensions are concerned there is lack of awareness and hence less spread of pension.
A lot of this could be attributed to low marketing initiatives and also the popularity of insurance annuities pushed pension from the limelight.

Lets tackle the main question what is a pension fund? A pension fund is set up to collect regular premiums from employees and their employers, invest those funds safely and profitably, and pay out a monthly income to employees who reach a specified age and retire. To whom does the pension fund really belong? It belongs to the subscribers or to the beneficiaries. The pension fund assets represent deferred employee compensation and so constitutes their personal property. So who are fund mangers and what role do they play? The fund managers may they be state bodies or private entities are trustees on behalf of the beneficiaries. Hence they must not be allowed to work against the interests of these beneficiaries most of whom are ordinary workers who have placed their life time savings in trust hoping that they would be enabled to take care of themselves and their families during the post retirement period.

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* Contributed by -
Swetha Narayanaswamy,
First Year M.B.A.,
ICFAI Business School, Mumbai.