A union pension is a pension plan organized under the care of a union. The overall idea of a pension is for an employee to pay into a plan during his or her working years. Then, upon retirement, the employee can cash in on the pension and receive a lump sum or annuity throughout retirement. Pension plans vary and fall under a handful of categories including private or individual, labor union, or occupational. Union pensions are typically considered defined-benefit plans. This means they are funded by the employer with no assistance from the employee. Compared to traditional employees, union workers are more likely to benefit from a pension.