A pension is a retirement plan established by an employer to provide retirement income to employees. Employers contribute to the pension fund, which is invested over time to generate returns. Upon retirement, employees receive regular pension payments based on their years of service and earnings.

A trust, on the other hand, is a legal arrangement where a person or entity (the trustee) holds and manages assets on behalf of beneficiaries. In the context of a pension plan, a trust is often set up to ensure that pension funds are managed and distributed appropriately to retirees.