Pension Funds Write For Us

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What are Pension Funds?

Pension funds, also called retirement funds, are a type of savings plan in which you (as an employee) invest a small portion of your income/salary in a designated savings plan. The primary goal of this plan is to earn a steady income after completing your years of active duty.

How do Pension Funds Work?

Traditional retirement plans, also called pension funds, have gradually disappeared from the private sector in recent years. Public sector employees, like government employees are the largest group with active and also growing pension funds.

Firstly, Private pension plans offered by corporations or other employers rarely have cost-of-living indexation to adjust for inflation, so the benefits they pay may decline in purchasing power over the years. And also, Public employee pension plans tend to be more generous than private plans. For example, the nation’s most extensive retirement plan, the California Public Employees Retirement System (CalPERS), pays 2% per year in many cases.

In this case, an employee with 35 years of service and an average salary of $50,000 could receive $35,000 annually.

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