Pension Theory

Pension theory involves understanding how retirement income systems are designed to provide financial security for workers after they retire. It considers sources like employer-sponsored pensions, government programs, and personal savings. The goal is to ensure individuals have enough income to maintain their standard of living when they stop working. This theory examines how contributions are made, how benefits are calculated, and how to balance sustainability for the system with fairness for contributors. Essentially, it’s about creating a reliable, equitable way for people to save and receive income in their retirement years.