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Free Pensions tutorial, A pension plan is a retirement plan that requires an employer to make contributions to a pool of funds set aside for a worker's future benefit. The pool of funds is invested on the employee's behalf, and the earnings on the investments generate income to the worker upon retirement.What are the three main types of pensions? There are three main types of pension. The state pension (paid by the Government), 'occupational' pensions (your pension through work) and private/personal pensions (what it says on the tin). Work pensions come in two main types.A pension is a fund into which a sum of money is added during an employee's employment years and from which payments are drawn to support the person's retirement from work in the form of periodic payments.