Retirement fund

A pension fund, also known as a superannuation fund in some countries, is any plan, fund, or scheme which provides retirement income.

Pension funds typically have large amounts of money to invest and are the major investors in listed and private companies. They are especially important to the stock market where large institutional investors dominate. The largest 300 pension funds collectively hold about $6 trillion in assets. In January 2008, The Economist reported that Morgan Stanley estimates that pension funds worldwide hold over US$20 trillion in assets, the largest for any category of investor ahead of mutual funds, insurance companies, currency reserves, sovereign wealth funds, hedge funds, or private equity.

The Federal Old-age and Survivors Insurance Trust Fund is the world's largest public pension fund which oversees $2.645 trillion USD in assets.

Open pension funds support at least one pension plan with no restriction on membership while closed pension funds support only pension plans that are limited to certain employees.

Closed pension funds are further subclassified into:

A public pension fund is one that is regulated under public sector law while a private pension fund is regulated under private sector law.

In certain countries the distinction between public or government pension funds and private pension funds may be difficult to assess. In others, the distinction is made sharply in law, with very specific requirements for administration and investment. For example, local governmental bodies in the United States are subject to laws passed by the states in which those localities exist, and these laws include provisions such as defining classes of permitted investments and a minimum municipal obligation.

The pension system in Romania is made of 3 pillars, one is the state pension (Pillar I - Mandatory), second is a private mandatory pension were the state transfers a percentage of the contribution it collects for the public pension and third an optional private pension (Pillar III - Voluntary).

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