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How do private pension funds operate?

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How do private pension funds operate?

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Good question. Very good question in view of recent history. The answer depends on what country you are talking about, and whether you mean corporate (i.e., employer-run) funds or totally private funds (like IRAs (USA), RRSPs (Canada), stakeholder pensions (UK), Third Pillar (France, Switzerland, etc.)). US 401(k)s and TSPs (for federal employees, details at http://www.tsp.gov/ ) are something of a hybrid because there is (usually) an employer contribution. I’m going to assume you mean the first kind, because that’s where most of the politics and grievance and crises are. Although 401(k)s, especially Enron’s, are not without fraud and grief. In the high-flying 1990s employers argued that their pension funds were over-funded and got permission, or sometimes unilaterally, took pension holidays or clawed back money from their funds. After the market crash, of course, the funds were no longer over-funded, but the firms didn’t pay back the mo

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