Pension is a fund into which a sum of money is added during an employee’s employment years, and from which payments are drawn to support the person’s retirement from work in the form of periodic payments. A pension may be a “defined benefit plan” where a fixed sum is paid regularly to a person, or a “defined contribution plan” under which a fixed sum is invested and then becomes available at retirement age.

Pension insurance contract is an insurance contract that specifies pension plan contributions to an insurance undertaking in exchange for which the pension plan benefits will be paid when the members reach a specified retirement age or on earlier exit of members from the plan.