Pension
A pension is a company-provided benefit paying a monthly amount to employees after they retire. Fewer and fewer companies are offering pensions, and if a company hits hard times, there's no guarantee retirees will get the full pensions they were promised.
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Expanded Definition
The AFL-CIO estimates 86% of union workers and 51% of nonunion workers participate in pension plans. It also relates the story of a retired steelworker whose former employer declared bankruptcy, leaving it to the federal Pension Benefit Guaranty Corp. to fund the pension. The PBGC cut the worker's monthly payment.
The PBGC is funded not by tax dollars but by sources including insurance premiums paid by sponsors of defined-benefit pension plans, investment income on that money, and money recovered from the companies formerly responsible for the plans.
Not all pension plans are eligible for PBGC funding.
Companies are more and more leaving retirement planning up to employees by providing such options as 401(k) plans, where the employee contributes the amount he wants and decides how to invest it. Some companies will match a percentage of employee contributions. These are defined-contribution plans, as opposed to pensions' defined-benefit moniker.
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