Defined Benefit (DB)
This is a type of pension scheme and examples include 'final salary' or 'career average related earnings'. The amount a member receives at retirement is based on a formula which takes into account a number of things, including their earnings and how long they have been a member of the pension scheme. In most schemes, when a member retires they can take some of the pension as a tax-free cash lump sum. The rest they receive as a regular income, on which they might pay tax.
Defined Contribution (DC)
These are also known as 'money purchase' schemes. This is a scheme where member contributions (and those contributions that an employer makes for the member) are invested. The amount available to provide benefits at retirement is based on how much has been paid in and how well the investments have performed.