What does pension mean?
A pension is a regular payment made to someone, most often after retirement. It may come from a government scheme, an employer’s occupational plan, personal savings, or an insurance contract. In British and American usage, “pension” commonly describes both the payment and the arrangement that provides it, as in “draw a pension” or “a workplace pension scheme.” The term can also refer more broadly to compensation awarded for past service, including a payment made when an employee is retired or dismissed. Its connotation is generally positive because it suggests financial security and recognition of sustained work, although retirement pensions can also be discussed critically when benefits are inadequate or difficult to obtain. The related verb is chiefly British and informal: to pension someone means to retire or dismiss them with a pension.
A regular payment, typically made after retirement, by a government, employer, insurer, or pension scheme.
"Her state pension provides a modest income throughout the year."
The word can denote either the payment itself or the scheme or arrangement providing it.
To retire or dismiss an employee with a pension.
"The factory pensioned several long-serving workers when production moved overseas."
Chiefly British and informal. The phrase “pension someone off” is especially common.
The plural is used for individual retirement payments, pension arrangements, or benefits in general.
"Several employees chose pensions from different providers."
A pension is a promise made across time: money provided now in exchange for a lifetime of work, service, or savings.
Reviewed by Deb Chak, Editor. AI-assisted content curated by RJS Tech Solutions LLP.
Where does pension come from?
The word entered English from Old French “pension,” a term derived from Latin “pensio,” meaning “payment,” ultimately associated with Latin “pendere,” “to weigh” and, by extension, “to pay.” The same root developed into English words including “pendant,” “pensive,” and “pendulum.” In English, “pension” was initially used for payments made to clergy or other recipients and later became especially associated with regular retirement income.
Related word forms
How pension is actually used
In British English, the verb “pension” is informal and somewhat dated: “they pensioned him off” means to retire or dismiss him with a pension. “Superannuation” is common in British, Australian, and some other Commonwealth usage but is not normally used in American English.
Easily confused with pension
A pension usually replaces earnings after retirement, whereas an annuity is a payment purchased from an insurer and may begin at any chosen age.