A pension is a plan where your employer promises to pay you money _after you retire_, in perpetuity. In the "olden days", or when working for the government, one often would work at the same employer for 20+ years, and a pension is a way for that employer to support you. (My dad has multiple pensions from when he worked at a large company, and then later for the local county government.) In general, it scales up the longer you worked for a company. This was back when companies and employees were "loyal" to one another.

That seems to be a lot less common now.

https://www.investopedia.com/ask/answers/100314/whats-differ...

When people say "pension" at least in the US they usually mean a defined benefit retirement plan, i.e. you get $X/month based on salary and years of service starting at age Y.

By contrast, a 401(K) is a defined contribution plan. You put however much money in, maybe get matching, and you can take money out after a certain age based on how much you put in and how much it grew.

Defined benefit used to be a lot more common but it's become less so for a variety of reasons including tax law changes. Today you see them mostly in government jobs like teachers.