Private pension funds are managed by management companies. Those are companies whose sole activity is to establish and professionally manage the pension fund. Therefore, these companies are staffed and equipped on the basis of adequate analysis and regulatory requirements, to professionally invest the funds of the pension fund. It is good to notice that the fund assets are separated from the assets of the company. It is owned by the fund members, in portion to their share. So, don’t worry, your money is secured. Best professionals are dealing with it, in order to make profit for themselves and for yourself too. Usually, pension funds are never invested in risky projects, so usually investment is investment in securities, with low rate of risk.
Thereby, the law regulates basic characteristics of investing policy of pension funds and the FED is supervising their business activity and investing programs.
Due to demographic changes in almost all modern developed countries, the pension systems based on inter generational solidarity are under pressure. In such systems, which are usually state pension funds systems, where the staff finance the pensions with their contributions. There are no more possibilities to pay out high amounts of pensions. Take a look to Greece situation – elders have high pensions, but unemployment is just „eating“ the yought of the country. They brings the whole system to shaky legs.
So, it is advised that young people to secure some additional source of income when it comes to old days, which will compensate that difference and complement the state pension. Think about how much money you will need when you retire. Then compare it to the state pension that you can count on. If there is some difference, it is time to consider the provision of additional source of income for that days.
Securing the adequate savings for elderly is one of those long term goals. Main key for savings is to start as soon as possible with small monthly amounts invested in voluntary pension fund. This could accumulate serious amounts of funds until the retirement comes.
When it is about choosing the pension fund, there are several things that you should consider. Ask if there is a plan for employed. Find out what are the conditions. It is often the situation that pension plans offer better conditions than individual membership in fund. Gather all those prospects from as many pension funds as possible. There you will find some basic, most important data about every pension fund.
Pay attention to every fee that the fund requires. Fees can seriously decrease the interest you are chasing for. The yields that the fund have made in earlier years are good to know. Consider that it doesn’t have to mean that it will be the case in future deals. Pay attention to examples that funds are representing. No one can clearly say what it is going to be in 20 or 30 years. So ask for yields and figure out if those numbers.