A pension is a fund into which amounts are paid regularly during an individual's working career, and from which periodic payments are made to support the person's retirement from work. A pension may be:

• a "defined benefit plan", where defined periodic payments are made in retirement. The sponsor of the scheme must make further payments into the fund if necessary to support these defined retirement payments, or
• a "defined contribution plan", under which defined amounts are paid in during working life, and the retirement payments are whatever can be afforded from the fund.