A
retirement plan in which an employer makes a
contribution into an account each month. The contributions are
invested on behalf of an
employee, who may begin to make
withdrawals after retirement. Typically, pensions are
tax-deferred, meaning that the employee does not pay taxes on the
funds in the pension until he/she begins making withdrawals. Pensions may have defined contributions, defined benefits, or both. See also:
401(k),
IRA.