ABSTRACT
Investment is by far the most important part of pension plan management. As discussed in Chapter 1, there are three major sources of income to pay for promised retirement benefits, employer and employee pension contributions, and investment income. Table 1.5 in Chapter 1 also indicates that, over time, investment income far outweighs pension contributions as a funding source for pension benefits. As the ultimate responsibility of any pension system is to ensure that there will be sufficient assets in place to pay pension benefits, investment management, therefore, is the top priority of the pension system and the governing board that is set up to manage the pension system.
