| Aspect | Pension | Retirement |
|---|---|---|
| Definition | A defined-benefit plan paying regular income after employment ends, typically based on salary and years of service. | The life stage when a person stops full-time work, funded by savings, investments, Social Security, or pensions. |
| Purpose | Provides a guaranteed, predictable income stream for life, reducing longevity risk for the retiree. | Represents the transition from earning wages to relying on accumulated assets and passive income sources. |
| Core Mechanism | Employer and sometimes employee contribute to a pooled fund, managed by professionals, paying a fixed monthly benefit. | Individuals accumulate wealth in 401(k)s, IRAs, and taxable accounts, then withdraw systematically to cover living expenses. |
| Funding Source | Primarily employer-funded, with contributions calculated actuarially to meet future promised benefits. | Self-funded through personal contributions, employer matches, and government benefits like Social Security. |
| Payment Structure | Fixed monthly payments for life, often with cost-of-living adjustments and spousal survivor options. | Variable withdrawals based on portfolio performance, withdrawal rate, and personal spending needs. |
| Investment Risk | Employer or plan sponsor bears investment risk; benefits are guaranteed by the plan's funding status. | Individual bears all investment risk; market downturns can reduce the sustainable withdrawal amount. |
| Longevity Protection | Guaranteed lifetime income, protecting against outliving assets regardless of how long you live. | Requires careful planning to avoid depletion; annuities may be purchased separately for lifetime income. |
| Portability | Typically tied to a single employer; changing jobs may reduce or freeze accrued benefits. | Highly portable; 401(k)s and IRAs can be rolled over between employers without losing tax advantages. |
| Employer Role | Employer manages the fund, makes contributions, and guarantees benefit payments under the plan rules. | Employer may offer matching contributions but has no ongoing obligation after employment ends. |
| Tax Treatment | Contributions are tax-deductible for employer; benefits are taxed as ordinary income when received. | Pre-tax contributions grow tax-deferred; withdrawals are taxed, while Roth accounts offer tax-free distributions. |
| Benefit Formula | Calculated using a formula: average salary × years of service × a multiplier (e.g., 1.5% per year). | No fixed formula; total nest egg depends on contribution rate, investment returns, and withdrawal strategy. |
| Inflation Adjustment | Many public pensions include automatic cost-of-living adjustments; private plans may not adjust. | Withdrawal strategies can include inflation-adjusted increases, but purchasing power depends on portfolio growth. |
| Early Retirement | Reduced benefits if taken before normal retirement age, often with a penalty of 5-8% per year. | Possible but requires higher savings rate; must bridge gap until Medicare and Social Security eligibility. |
| Vesting Period | Typically 5 years to become fully vested; partial vesting may apply after 3 years of service. | Immediate ownership of personal contributions; employer match vests over 1-6 years depending on plan. |
| Death Benefits | Survivor benefits for spouse or beneficiaries, often 50-100% of the pension, depending on election. | Remaining assets pass to heirs; no guaranteed survivor income unless an annuity is purchased. |
| Cost to Employee | Often no employee contribution required in public plans; private plans may require 3-6% of salary. | Employee typically contributes 5-15% of salary, often matched by employer up to 4-6%. |
| Management Fees | Professional fund management fees are borne by the plan, typically 0.5-1.5% of assets annually. | Individual investors pay expense ratios, often 0.03-0.75% for index funds or higher for active funds. |
| Flexibility | Limited; retirees cannot choose lump-sum withdrawals or adjust monthly payment amounts easily. | High flexibility; retirees can adjust withdrawal amounts, change investments, or take irregular distributions. |
| Regulatory Oversight | Governed by ERISA for private plans; public plans follow state laws and actuarial standards. | Governed by IRS rules for tax-advantaged accounts, including contribution limits and required minimum distributions. |
| Market Exposure | Minimal direct exposure; plan assets are pooled and professionally diversified across bonds, stocks, and alternatives. | Direct exposure; retirees must manage asset allocation, rebalancing, and sequence-of-returns risk. |
| Income Predictability | Highly predictable; monthly checks are known in advance, simplifying budgeting for retirees. | Less predictable; income varies with portfolio value, requiring flexible spending plans. |
| Inflation Risk | Partially mitigated if cost-of-living adjustments exist; otherwise, fixed payments lose purchasing power over time. | Managed by investing in growth assets; retirees may use TIPS or dividend stocks to hedge inflation. |
| Funding Shortfall | Underfunded plans may reduce benefits or require government bailouts; PBGC insures private plans up to limits. | No external backstop; retirees must adjust spending if portfolio underperforms or withdrawals are too high. |
| Contribution Limits | No individual contribution limits; employer determines funding based on actuarial calculations. | Annual limits: $23,500 for 401(k) and $7,000 for IRA in 2025, with catch-up contributions for those 50+. |
| Withdrawal Rules | Benefits begin at retirement age; early withdrawals are rarely allowed except for disability or hardship. | Penalty-free withdrawals after age 59½; required minimum distributions start at age 73 for traditional accounts. |
| Spousal Coverage | Automatic survivor benefits for married retirees unless waived with notarized spousal consent. | No automatic coverage; spouses must be named as beneficiaries or purchase joint annuities. |
| Lump-Sum Option | Some plans offer a one-time lump-sum payout, often discounted versus the lifetime annuity value. | Entire account balance is available as a lump sum, subject to taxes and potential penalties. |
| Historical Prevalence | Common in the 20th century; private-sector pensions declined from 38% of workers in 1980 to 15% today. | Dominant retirement model since the 1980s; 401(k) plans now cover over 70% of private-sector workers. |
| Best-Fit Scenario | Ideal for career employees seeking guaranteed lifetime income with minimal investment decisions. | Best for self-directed savers who value flexibility, portability, and control over their retirement assets. |
A pension is a retirement plan that pays you a fixed income for life, funded by employer contributions and often your own. It replaces a portion of your working salary after you stop working, providing financial security in old age.
A pension is a defined-benefit retirement arrangement where an employer guarantees a monthly payment based on your salary history and years of service. Unlike personal savings, the employer bears the investment risk, ensuring predictable lifetime income that typically begins at age 65.
| Characteristic | What It Means in Practice |
|---|---|
| Defined benefit | Your monthly payout is calculated using a fixed formula, often 1.5% of average salary per year worked, so you know your exact income upfront. |
| Employer funded | Your company contributes most or all of the money; you may add small employee contributions, but the employer covers the bulk of costs. |
| Lifetime payout | Payments continue until death, not until a balance runs out, protecting you against outliving your savings. |
| Vesting period | You must work 5 years at most companies to earn full ownership of pension benefits; leaving early may forfeit some or all of them. |
| Guaranteed income | Payments are insured by the Pension Benefit Guaranty Corporation up to $77,000 per year in 2024, reducing default risk. |
| No investment choice | You cannot choose stocks or bonds; the plan manager decides the portfolio, limiting your control but removing decision stress. |
| Early retirement penalty | Starting at age 55 instead of 65 cuts monthly checks by roughly 30-40%, reflecting longer expected payout duration. |
| Inflation adjustment | Only 30% of private pensions include cost-of-living raises, so your purchasing power may erode over 20+ years of retirement. |
| Spousal survivor benefit | You can elect a reduced payout (e.g., 50% less) so your spouse continues receiving income after your death. |
| Tax deferred growth | Contributions and investment gains grow tax-free until withdrawal, then you pay ordinary income tax on each monthly check. |
| Advantages | Limitations |
|---|---|
| Provides predictable monthly income that never runs out, unlike a 401(k) balance you must budget carefully. | Locks your money into the plan; you cannot access funds early without steep penalties or waiting until age 55. |
| Shifts investment risk to the employer, so market crashes in 2008 or 2020 do not reduce your promised benefit. | Offers no inheritance value; if you die early, remaining funds typically go to the plan, not your heirs. |
| Rewards long tenure with higher multipliers, so 30 years of service yields 60% of your final salary. | Requires job loyalty; switching employers resets your vesting clock, often losing 10-20% of accrued benefits. |
| Includes survivor options that protect a spouse from poverty after your death, unlike personal IRAs. | Pays a fixed nominal amount; without cost-of-living adjustments, a $2,000 check loses 50% of value over 25 years. |
| Backed by federal insurance (PBGC) that guarantees up to $77,000 annually, even if your company goes bankrupt. | Limits your control over asset allocation, so conservative plans may lag inflation during high-growth periods. |
| Simplifies retirement planning because you know exact income, eliminating guesswork about withdrawal rates. | Offers no flexibility to take lump sums for emergencies, home purchases, or medical expenses. |
| Encourages savings discipline since contributions are automatic, unlike voluntary 401(k) deferrals. | Penalizes early retirement; starting at 62 instead of 65 reduces monthly checks by about 25% permanently. |
| Provides a stable base that complements Social Security, covering 30-50% of pre-retirement income needs. | Faces underfunding risk; many state plans have only 70% of assets needed, creating future benefit cut threats. |
| Offers professional management with lower fees than retail mutual funds, typically 0.5% vs 1.5% expense ratios. | Creates portability issues; rolling over a pension to an IRA often forfeits the lifetime annuity guarantee. |
| Reduces cognitive burden in old age, as you receive checks without making investment decisions. | Disappears in the private sector; only 15% of U.S. workers have a pension today, down from 38% in 1980. |
Retirement is the permanent exit from full-time paid work, typically beginning in a person's sixties. It replaces earned wages with personal savings, pensions, and government benefits. Retirement exists to provide financial security and leisure time after decades of labor, allowing individuals to pursue personal interests without employment obligations.
Retirement is the formal, irreversible cessation of active employment, marked by the transition from wage-based income to reliance on accumulated assets, employer-sponsored plans, and state-provided benefits. This life stage is defined by eligibility criteria, often age-based (commonly 62–67 in the US), and requires sufficient funding to cover 20–30 years of living expenses.
| Characteristic | What It Means in Practice |
|---|---|
| Income source shift | Workers replace regular paychecks with withdrawals from 401(k)s, IRAs, Social Security, and personal savings accounts. |
| Age eligibility | Full Social Security benefits begin at age 66–67, while early retirement at 62 reduces monthly payouts permanently by up to 30%. |
| Longevity planning | Retirees must budget for 20–30 years of expenses, requiring a withdrawal rate near 4% annually to avoid depleting assets. |
| Healthcare dependency | Medicare eligibility starts at 65, but retirees retiring earlier must purchase private insurance until coverage begins. |
| Voluntary vs. forced | Some retire by choice, while others face mandatory retirement due to health issues, layoffs, or caregiving responsibilities. |
| Lifestyle restructuring | Daily routines lose work structure, requiring retirees to build new social networks and purposeful activities to maintain well-being. |
| Tax implications | Withdrawals from traditional retirement accounts count as taxable income, while Roth accounts and municipal bonds offer tax-free options. |
| Inflation exposure | Fixed pension payments lose purchasing power over time, whereas Social Security includes annual cost-of-living adjustments. |
| Debt management | Entering retirement with mortgages or credit card debt reduces disposable income, making debt-free status a critical pre-retirement goal. |
| Phased transition | Many workers gradually reduce hours or work part-time for several years before fully stopping, easing both financial and psychological adjustment. |
| Advantages | Limitations |
|---|---|
| Retirement grants full control over daily time, enabling travel, hobbies, and family pursuits without employer schedules or deadlines. | Retirement removes regular income, forcing retirees to rely on fixed assets that may not keep pace with unexpected expenses or market downturns. |
| Retirement eliminates commuting costs, work-related clothing expenses, and daily meals out, potentially reducing monthly spending by 15–20%. | Retirement accelerates cognitive decline for some individuals, as reduced mental stimulation from work can impact memory and problem-solving skills. |
| Retirement allows relocation to lower-cost areas, where housing and taxes are cheaper, stretching retirement savings significantly further. | Retirement creates social isolation risk, since workplace friendships often fade, and 30% of retirees report feeling lonely within the first year. |
| Retirement provides time for preventive healthcare, including regular exercise, better nutrition, and consistent medical screenings that improve longevity. | Retirement exposes retirees to sequence-of-returns risk, where early portfolio losses during the first five years permanently reduce sustainable withdrawal amounts. |
| Retirement removes workplace stress, lowering cortisol levels and reducing risks of hypertension, heart disease, and burnout-related illnesses. | Retirement complicates healthcare access before age 65, with private insurance premiums costing $500–$1,000 monthly per person in the US. |
| Retirement enables caregivers to devote full attention to aging parents, grandchildren, or spouses with chronic conditions without work conflicts. | Retirement forces withdrawal decisions from tax-advantaged accounts, and missing required minimum distributions after age 73 triggers 25% penalty taxes. |
| Retirement offers flexibility to pursue unpaid passion projects, volunteer work, or artistic endeavors that generate meaning without financial pressure. | Retirement locks in lower Social Security benefits if claiming early, with a 62-year-old receiving 30% less monthly than waiting until full retirement age. |
| Retirement eliminates performance reviews, office politics, and career advancement pressure, reducing psychological burden and increasing life satisfaction. | Retirement creates identity loss for career-oriented professionals, particularly executives and doctors, who struggle to define self-worth without job titles. |
| Retirement allows strategic tax planning, such as converting traditional IRA funds to Roth accounts during low-income years to reduce lifetime tax liability. | Retirement increases longevity risk, as living past 90 requires stretching savings over 30+ years, with 1 in 4 retirees outliving their planned budget. |
| Retirement provides opportunity to renegotiate family roles, allowing couples to share household duties equally and deepen personal relationships. | Retirement reduces employer-sponsored life insurance and disability coverage, forcing retirees to purchase individual policies at higher age-based premiums. |
| Shared Aspect | How Pension and Retirement Are Alike |
|---|---|
| Primary Purpose | Both a pension and retirement savings replace earned income after you stop working. |
| Income Source | A pension and retirement accounts both provide a steady stream of funds during your non-working years. |
| Long-Term Planning | Both pension plans and retirement strategies require decades of consistent financial contribution and forecasting. |
| Age Eligibility | Pensions and retirement withdrawals typically start at age 59½ or 65 without early-payment penalties. |
| Tax Deferral | Both pension contributions and retirement account deposits grow tax-deferred until you take distributions. |
| Employer Involvement | Employers sponsor pensions and often match retirement plan contributions, linking both to your job. |
| Monthly Payouts | Pensions pay monthly checks, and retirement accounts can be structured to mimic that same regular payout. |
| Investment Growth | Both pension funds and retirement portfolios rely on stock, bond, and real estate market returns over time. |
| Risk Management | Pensions and retirement savings both use diversified asset allocation to reduce market volatility losses. |
| Inflation Protection | Both pension plans and retirement income strategies adjust for rising living costs via cost-of-living riders. |
| Survivor Benefits | Pensions and retirement accounts both offer spousal or beneficiary continuation options after the owner dies. |
| Government Regulation | Pensions follow ERISA rules, and retirement accounts comply with IRS code, giving both legal oversight. |
| Contribution Limits | Both pension formulas and retirement plan caps restrict how much pre-tax money you can set aside annually. |
| Vesting Period | Pensions and employer-matched retirement funds both require several years of service before you own the assets. |
| Withdrawal Rules | Both pensions and retirement accounts impose required minimum distributions starting at age 73. |
| Financial Security | Pensions and retirement nest eggs both aim to prevent poverty and ensure basic living expenses in old age. |
| Lump-Sum Option | Some pensions allow a one-time cash buyout, just as retirement accounts permit full or partial lump-sum withdrawals. |
| Portfolio Diversification | Both pension fund managers and retirement savers spread assets across multiple sectors to balance risk. |
| Actuarial Assumptions | Pensions and retirement calculators both use life expectancy and interest-rate projections to set payout levels. |
| Legal Protection | Pension benefits and retirement accounts are both shielded from creditors and bankruptcy proceedings. |
| Professional Management | Pensions hire fund managers, and retirement savers often use advisors or robo-advisors for similar expertise. |
| Behavioral Discipline | Both pension auto-enrollment and retirement auto-deductions rely on habitual saving without emotional decisions. |
| Retirement Age Link | Pensions and retirement accounts both define a specific age when full benefits or penalty-free access begins. |
| Cost Structure | Both pensions and retirement plans charge administrative fees for recordkeeping, custody, and investment management. |
| Liquidity Constraints | Pensions and retirement accounts both restrict early access, preventing impulsive spending before retirement. |
| Spousal Rights | Pensions require spousal consent for payout changes, and retirement accounts mandate spouse as default beneficiary. |
| Longevity Focus | Both pension annuities and retirement drawdown plans are designed to last for your entire remaining lifespan. |
| Taxable Distributions | Pension checks and retirement withdrawals are both taxed as ordinary income at your current federal and state rate. |
| Financial Literacy Need | Understanding pension formulas and retirement withdrawal rates both require basic math and investment knowledge. |
| Post-Work Lifestyle | Both pensions and retirement savings fund the same goal: a stable, independent lifestyle after your career ends. |
The deciding variable is whether you want a guaranteed, fixed income for life or flexible control over your own savings. A pension provides employer-funded certainty; retirement accounts like a 401(k) or IRA give you investment choice and liquidity. Most people benefit from combining both, but your choice hinges on your need for predictable cash flow versus tax and withdrawal flexibility.
Choose Pension when you prioritize lifetime income stability over investment growth. It suits people with low risk tolerance, no desire to manage investments, or a family history of longevity. Pensions also win for those who want spousal survivor benefits without market volatility. They are ideal for retirees with fixed monthly expenses exceeding Social Security, and for workers in government or union jobs where employer contributions are substantial.
Choose Retirement when you value control, portability, and growth potential. This fits people with high risk tolerance, multiple income streams, or a desire to leave an inheritance. Retirement accounts like 401(k)s and IRAs are better for early retirees needing penalty-free access after age 59½, and for those who want tax diversification via Roth contributions. They also suit self-employed individuals or job-changers who need to roll over savings without losing value.
| Common Myth | The Reality |
|---|---|
| "A pension and a retirement plan are the same thing." | A pension is a specific defined-benefit plan, while retirement is the life stage; a 401(k) is a different retirement vehicle. |
| "Only government workers get pensions today." | About 15% of private-sector workers still have a pension, but most new hires now get 401(k)s instead. |
| "Your pension is guaranteed to pay forever." | Private pensions rely on PBGC insurance, which caps monthly payouts at about $7,500, so large pensions can lose value. |
| "Retirement means you stop working completely." | Over 20% of retirees work part-time, and many transition to phased retirement or consulting roles for income. |
| "A pension pays the same amount as Social Security." | Pensions typically replace 40-60% of final salary, while Social Security replaces only about 37% for average earners. |
| "You can withdraw your pension anytime you want." | Pensions lock funds until age 59.5 or plan-specific retirement age, unlike a 401(k) which allows penalty-free withdrawals at 59.5. |
| "Retirement planning only matters for rich people." | Median retirement savings for all U.S. households is just $87,000, so even modest earners need a strategy to avoid shortfalls. |
| "Pensions are always better than a 401(k)." | Pensions offer fixed income but lack portability; a 401(k) gives you control, investment choice, and can outperform if contributions are high. |
| "Retirement age is always 65 for everyone." | Full Social Security retirement age ranges from 66 to 67 depending on birth year, and pensions often have separate age rules. |
| "If you leave a job, you lose your pension." | Vested pensions are preserved; after 5 years of service, you keep a reduced benefit payable at retirement age. |
| "Retirement means your expenses drop dramatically." | Healthcare costs rise sharply; a 65-year-old couple may need $315,000 for medical expenses in retirement, not less. |
| "Pensions are adjusted for inflation automatically." | Only about 30% of private pensions offer full COLA; most are fixed, so purchasing power erodes over 20-30 years. |
| "You can rely solely on your pension for retirement." | A typical pension covers only 40-60% of pre-retirement income, leaving a gap that requires savings or part-time work. |
| "Retirement planning starts at age 50." | Starting at 25 with $200 monthly can grow to $500,000 by 65, while starting at 50 needs $1,200 monthly for the same result. |
| "Pensions are taxable income just like wages." | Pension payments are taxed as ordinary income, but if you made after-tax contributions, a portion is tax-free each year. |
| "Retirement means you never touch your principal." | The 4% rule suggests withdrawing principal plus interest; most retirees spend down assets over 30 years, not just live off interest. |
| "A pension from a bankrupt company is worthless." | The PBGC steps in for terminated plans, but it caps benefits; high earners may lose up to 50% of their promised pension. |
| "Retirement is the same as being unemployed." | Retirement is voluntary and planned, while unemployment is involuntary; retirees also have access to Medicare and pension income streams. |
| "You must choose between a pension and Social Security." | Most workers can receive both; the Windfall Elimination Provision only reduces Social Security for those with non-covered pensions. |
| "Retirement accounts and pensions are both employer-funded." | Pensions are employer-funded, but 401(k)s rely on employee contributions; 80% of 401(k) assets come from worker deferrals. |
| "Pensions are portable if you switch jobs." | Pensions are not portable; you leave the benefit behind, whereas a 401(k) can be rolled into an IRA or new employer plan tax-free. |
| "Retirement planning is just about saving money." | It also involves withdrawal sequencing, tax strategy, healthcare decisions, and longevity risk—factors that affect 50% of retirement success. |
| "A pension guarantee is the same as FDIC insurance." | PBGC insurance is not government-backed like FDIC; it relies on premiums from other plans and can face funding shortfalls. |
| "Retirement at 62 is always a smart financial move." | Claiming Social Security at 62 reduces monthly benefits by up to 30% permanently, costing a typical retiree $100,000+ over a lifetime. |
| "Pensions are only for union workers." | While unions cover 90% of union members, many non-union employers like IBM and Verizon still offer cash balance pensions. |
| "Retirement means you stop earning any income." | About 26% of retirees earn wages or self-employment income, and many use rental properties or dividends for cash flow. |
| "A pension is a savings account you own." | A pension is a promise from the employer; you do not own the assets, and the plan sponsor controls investment decisions. |
| "Retirement planning ends when you retire." | Post-retirement planning involves required minimum distributions, Roth conversions, and tax-efficient withdrawals that change every year. |
| "Pensions and 401(k)s both offer lump-sum options." | Only 20% of pensions offer lump sums; most pay annuities, while 401(k)s always allow lump-sum or periodic withdrawals. |
| "Retirement is a single event, not a process." | Retirement is a multi-year transition involving emotional, social, and financial adjustments; 40% of retirees move or change lifestyle within 5 years. |
Difference Between Pension and Retirement is clear: a pension is a defined income stream, while retirement is the life stage you fund. Choose a pension for guaranteed monthly payouts; choose retirement planning for flexibility and control over your savings. Most workers need both strategies to secure financial stability.
## FAQ ### What is the difference between a pension and retirement savings? A pension is an employer-funded defined-benefit plan that guarantees a fixed monthly income for life, while retirement savings like a 401(k) or IRA are defined-contribution accounts you fund yourself, with no guaranteed payout amount. ### Is a pension better than a 401(k) for guaranteed income? Yes, a pension is better for guaranteed lifetime income because the employer bears the investment risk and promises a specific benefit, whereas a 401(k) puts the risk on you and your account balance can fluctuate with markets. ### Which is more cost-effective for an employer, a pension or a 401(k)? A 401(k) is more cost-effective for employers because contributions are typically matched at 3-6% of salary, while pensions require actuarial funding that often costs 10-15% of payroll annually to meet future obligations. ### What are the main risks of relying on a pension versus personal retirement accounts? The main pension risk is underfunding or employer bankruptcy, which can reduce benefits through the PBGC up to a capped amount, while personal accounts carry market risk but offer full ownership and portability without cap limits. ### Can I have both a pension and a 401(k) at the same time? Yes, you can have both a pension and a 401(k) simultaneously, as many government and union employers offer a pension alongside a supplemental defined-contribution plan, allowing you to build multiple income streams for retirement. ### What is a common beginner mistake when comparing pension and retirement plans? A common beginner mistake is ignoring the vesting period, which for pensions often requires 5-10 years of service to earn any benefit, while 401(k) employer matches typically vest within 1-3 years, so leaving early can cost you thousands. ### Are pension and retirement income interchangeable terms in financial planning? No, pension and retirement income are not interchangeable because a pension is one specific income source, while retirement income includes Social Security, withdrawals from 401(k)s, IRAs, annuities, and part-time work combined together. ### How do I switch from a pension plan to a 401(k) without losing value? To switch from a pension to a 401(k) without losing value, request a lump-sum payout or rollover of your vested pension balance into an IRA within 60 days, but compare the lump sum against the lifetime annuity value first. ### What is a real-world use case where a pension outperforms personal retirement savings? A real-world use case where a pension outperforms personal savings is for a long-tenured employee retiring at 65 with 30 years of service, because the pension's guaranteed 60-80% of final salary replaces income far more reliably than a volatile 401(k) balance. ### Can I switch from a 401(k) to a pension plan mid-career? Yes, you can switch from a 401(k) to a pension plan mid-career if you change employers to one offering a defined-benefit plan, but you must roll over your existing 401(k) into an IRA, not into the pension, since pensions do not accept direct rollovers.