|
Basis |
Annuity |
Pension |
|
Meaning |
Annuity refers to a financial product in which a fixed/variable sum of money is paid to an individual at regular intervals. |
Pension refers to the retirement benefit that only employees of certain companies receive, after they have retired from service. |
|
Type of product |
Insurance product |
Retirement product |
|
Can it be bought? |
An annuity can be purchased from any insurance company. |
Pension cannot be generally purchased, since the company makes pay-outs to ex-employees. |
|
Volatility |
Annuity payment may be fixed or variable, depending on the contract. |
Pension payment is fixed, divided into various intervals. |
|
Calculation |
It is calculated on the basis of the amount invested. |
It is calculated on the basis of the total amount earned during all the years of service, adjusted for the number of years. |
