Benefits Of A Pension Fund

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Introduction A pension fund, also known as a superannuation fund or super fund is any plan, fund, or scheme which provides retirement income. A pension fund is established by a company, governmental institution or labour union to pay for the (future) pension benefits of retired workers. Superannuation funds collect retirement savings from workers and their employers, and invest this money in a wide range of assets. Because pension funds manage the money of up to millions of individuals, they are major players in the financial markets. Australian superannuation funds are major investors in the domestic and global capital markets. Other than a few very specific provisions in the Superannuation Industry funds are not subject to any asset requirements or investment exposure flaws. There are no minimum rate of return requirements, nor a government guarantee of benefits. There are some minor restrictions on borrowing and the use of derivatives and investments in the shares and property of employer sponsors of funds. As a result, superannuation funds tend to invest in a wide variety of assets with a mix of duration and risk/return characteristics. In an efficient market at any point in time the actual price of a security will be a good estimate of its intrinsic value. An efficient-market is defined as a market where there are large numbers of rational, profit-maximizers actively competing, with each trying to predict future market values of individual securities, and where
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