Pension fund
InvestingDefinition
A fund that manages contributions to pay future retirement benefits. Two main types: defined benefit (DB) — pays a fixed pension based on tenure and salary (employer bears investment risk); defined contribution (DC) — employer contributes; investment returns determine retiree's payout.
US public DB pensions run ~$5T AUM, often underfunded (CalPERS ~70% funded). Pension reform has shifted most private-sector employees to DC (401(k)s).
US public DB pensions run ~$5T AUM, often underfunded (CalPERS ~70% funded). Pension reform has shifted most private-sector employees to DC (401(k)s).