What’s the difference between defined benefit and defined contribution pensions?

A defined benefit pension is based on your salary and how long you’ve worked for your employer. It guarantees a set income in retirement. A defined contribution pension, on the other hand, is based on how much you and your employer contribute and how your investments perform. The amount you get at <span class="tool" data-tip="Retirement is the phase of life when you stop working and rely on savings, a pension, or retirements for your income.”>retirement depends on these factors. Most workplace pensions today are defined contribution, offering more flexibility but also carrying more risk than defined benefit pensions.