Pension funds are investment pools that collect and manage funds contributed by employers and employees to provide retirement income. These funds are typically managed by professional investment firms and are designed to grow over time, ensuring that retirees have a stable source of income when they stop working. The money in pension funds is invested in various assets, such as stocks, bonds, and real estate, to maximize returns. The goal is to accumulate enough capital to meet future obligations to retirees. Retirement planning is crucial for ensuring that these funds remain solvent and can meet their long-term commitments.