What is a Pension ?

There is no legal definition of the term “pension”. The term which is now generally used to refer to income in old age has had different meanings at different times.

The provision of an income for those who have ceased their employment after reaching a certain age is new. In the developed world modern retirement provision is less than a century old and in Ireland took root only twenty five years ago. These developments in pensions and retirement have been the product of economic and social change. However, the legal response to these changes has been haphazard.

The meaning of the term “pension” has varied over the years. Rhodes# states :

“To the eighteenth century and earlier a pension was simply a source of income; it might be given after long and faithful service but equally it might be no more than a regular payment or subsidy for current service; it might be given to a worthy official but equally it might be given to a royal favourite or mistress. Dr. Johnson in his dictionary of 1755 caustically remarked : ‘In England it is generally understood to mean pay given to a state hireling for treason to his country.’.”

Today “pension” is understood to mean the receipt of an income in old age, normally after employment has ceased. The fact that there are many different types of pensions causes confusion.

All pensions provide an income for those who have reached a certain age and in the case of retirement pensions for those who have ceased a particular employment.

An occupational pension may be described as deferred pay received in retirement upon ceasing employment in the private sector.