What is the main purpose of a pension fund?

The main purpose of a pension fund is to collect worker contributions and invest them. Pension funds are designed to accumulate savings over time so that they can provide financial support to employees after retirement. Contributions typically come from both the employer and the employees, and the funds are invested in a variety of assets to grow over the long term. This investment strategy helps to ensure that there are sufficient funds available to pay out benefits when retirees access their pension, thus allowing individuals to maintain their standard of living in retirement.

While other options may seem related to financial services, they do not accurately describe the primary function of a pension fund. For instance, engaging in high-risk investments for profit is not the main focus of pension funds, as they usually aim for stable, long-term growth to secure retirement benefits. Offering loans to retirees and generating insurance policies are different services that do not align with the core mission of pension funds, which centers on building a fund through contributions and investments to support retirement income.