Pension = Defined Benefit plan > This plan is generally 100% funded by your employer. It's your money, their promise to you. In the plan document, there is a formula and it will tell you your benefit at retirement. The benefit can't change due to market performance. It's the employer's responsibility to fund the plan appropriately to account for that. The money is yours, you get it when you quit, retire or via death if there's a joint an survivor provision. Typical formulas require a number of years and base your benefit off your the last several year's salary. Pensions are RARE these days, but they are gaining popularity. If your company offers one, hold on to it as it's essentially free Social Security at retirement. Besides, there's nothing stopping you from investing in an IRA on the side.... That all being said, are you certain the formula requires you to pay "a lot" into the pot? Most DB plans i've worked with didn't require you to pay anything at all, it was entirely employer funded. Additionally, The selling point to this is you are guaranteed a salary at retirement. Doesn't matter what happens to the market, you are more or less guaranteed this money. A level of certainty you will never reach in a 401(k) since you are subject to the penalties to poor investments.

401(k) = Defined Contribution plan > This plan is primarily funded by the employee with the (potential) for the employer to kick in here and there. You determine your benefit based on how you invest and how much you contribute. The money is yours just the same, the only difference, you don't have to earn it via some complex formula as with a Pension.