Pension Fund Management: A Global Perspective

Pension funds are known worldwide more for their social security element. They have assumed more importance from the day the private sector has started replacing the state. In a pension fund system, any employee working with the state enterprise was saving in bits and pieces in the pension funds and was assured of his social security needs once he retired. In the absence of such a system, the employees have to save on their own and perhaps sometimes put in more hours of work to sustain. But with pension funds, employees of both state and private sector are assured of their future safety.

Over the last century, pensions have extended financial support to millions of retired people all over the world. However, due to the continuous bearish trend in the financial markets, most pension funds have turned red. The growing mismatch of assets and liabilities in pension funds has raised serious concerns about the future of the retirees.

Social security has been assuming centerstage ever since the collapse of the stock markets in the year 2000. Though initially, very few people were worried about the future of their social security, it has now transformed into a big crisis. A large population across the world is seriously affected by depreciation of funds investments. Pension funds riding high on the bull market of the late 1990s have promised more returns to investors than what can be really affordable.