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by dragonwriter
4532 days ago
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A pension is generally a defined benefit retirement plan (a guaranteed annuity), whereas a 401(k) is one (of many) kinds of defined contribution retirement plans. A "contributory pension" is a pension to which an employee makes contributions from, a "noncontributory pension" is one where the entire amount is funded by the employer, which is a different axis of distinction from the pension (defined benefit) vs. defined contribution distinction. |
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Ah, this is the difference. For me (in the UK), a pension can be either defined benefit or defined contribution.
There are three positions on your contributory axis - noncontributory (employer pays all), contributory (employer and employee pay), and personal (completely independent of employer).