Pension funds are established by a company, government, or union to manage and grow retirement savings through investments. These funds aim to provide a steady income stream to retirees. Pension funds are typically organized into two main types: defined benefit plans, which guarantee a specific payout upon retirement, and defined contribution plans, which depend on the amount contributed and the performance of investments. The fund's assets are pooled and managed to achieve long-term growth while minimizing risks for the benefit of the contributors.