Retirement Fund


Retirement Fund, also known as Pension Fund is the fund or pool of assets that forms an independent legal entity and is used exclusively for financing pension plan benefits of the employees. Retirement funds are used for the payments of retirement, disability and death benefits of the employees, of both, government as well as private.

Retirement funds, besides acting as retirement benefit funds, also play important roles in corporate world. Retirement funds are also major shareholders of the private organizations. There can be two variations of retirement funds. Public Retirement Funds are regulated under public sector law, while the Private Retirement Funds are regulated under the law of private sector.

Types of Retirement Fund

There can be two types of retirement funds, viz. Open Retirement Fund and Closed Retirement Fund.

Open Retirement Fund: These retirement funds are the funds that support a minimum of one pension plan with no restriction on membership.

Closed Retirement Fund: These retirement funds support only limited retirement plans. Closed retirement funds can have following variations:

  • Single Employer Retirement Fund
  • Multi-employer Retirement Fund
  • Related Member Retirement Fund
  • Individual Retirement Fund


Retirement funds are meant for providing retirement benefits and some other benefits to the employees. Employees contribute a certain amount towards the development of the fund. The fund is used for the benefit of the employees, including retirement, disability and death benefits.

Employees can receive the refund of their contributions only when they stop working. Rolling over of refund to a qualified plan is also permissible.

When you are changing your job, you can transfer the service credit. For this, your new employer just needs to submit a notice of enrollment. The service credit would continue to build up and will be credited to your account.

You can also estimate your pension. You can also use several pension calculators available online.