A pension plan is essentially retirement insurance that typically entails annuity payments to the pension plan owner. Your pension varies greatly based on several factors. For example, there are a few types of pensions including employer owned, private, and union. Each type of pension comes with its own set of pros and cons. An individual who owns a private pension is sometimes subjected to higher fees than they would be if they had a employer-based pension plan. An employer who hosts pension plans for employees often donate to the plan in conjunction with the employee's contributions. With a union pension plan, most programs are paid for in full by the employer and the employee does not contribute any money to the plan. Once you retire, there are two ways you will receive your pension..