Pension Fund
An investment fund within a pension scheme that is intended to accumulate during your working life from contributions and investment income.
With a defined contribution money purchase pension scheme, the intention is that the fund will be used to provide an income in retirement from the purchase of an annuity, with the option of part of the fund being taken as a tax-free cash lump sum. In a defined benefit salary-linked pension scheme the funds will be used to pay the promised pension.
In both cases the fund will normally be managed by an assurance company that will adopt an investment strategy that takes account of the long-term objectives of the fund and the expected calls to be made on it.