Sunday, May 10, 2009

Pension funds

private and government (including federal,state,and local)pension funds provide retirement income to employees covered by the pension plan.Funds are collected by regular contributions from employees,usually via payroll deduction. Since the funds flowing in are not demand deposits,you cannot write a check against your balance in a pension funds.Like life insurance companies,these institutions can accurately predict payouts and hence can hold long-term assets. They hold portfolios consisting mostly of stocks and bonds. The returns on these assets are paid out to participating individuals wen they reach retirement age.

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