series of periodic money payments made to a person who retires from employment because of age, disability, or the completion of an agreed span of service. The payments generally continue for the remainder of the natural life of the recipient, and sometimes to a widow or other survivor. Military pensions have existed for many centuries; private pension plans originated in Europe during the 19th century.

Eligibility for and amounts of benefits are based on a variety of factors, including length of employment, age, earnings, and, in some cases, past contributions. Benefits are sometimes also arranged to complement payments from public social-security (social security) programs. Although public and private pension plans have undergone parallel development in the United States and Britain, in other countries—e.g., Italy and Sweden—the existence of social-security programs paying generous retirement benefits has to some extent precluded significant development of private pension plans. In other cases, though, as in Germany, private programs have been widely adopted in spite of large social-security benefits.

Pensions may be funded by making payments into a pension trust fund (or a pension foundation in some European countries) or by the purchase of annuities from insurance companies. In plans known as multiemployer plans, various employers contribute to one central trust fund administered by a joint board of trustees. Such plans are particularly common in The Netherlands and France and in industries in the United States.