Definition of the word pension

The word "pension" originates from the Latin word "pensum," meaning "payment" or "reward." In medieval times, a pension referred to a sum of money paid to a person, usually a retired soldier or clergyman, as a reward for their service. The term was later adopted in the 16th century to describe a regular payment made to a former employee, typically a government officer or a member of the clergy, as a form of retirement benefit. Over time, the meaning of the word expanded to include any regular payment made to an individual, often in retirement, as a payment for their work or services. Today, the term "pension" is commonly used to describe a range of retirement plans, including defined benefit plans, defined contribution plans, and individual retirement accounts (IRAs).