This paper uses economic principles to analyse concepts used in the area of pensions. It discusses the issue of an efficient pension system and tipical dychotomies: unfunded versus funded, private versus public and defined contribution versus defined benefit. The paper uses the concept of Notional Defined Contribution, as a vehicle of ananlysis of central issues of pension economics. The concept is discussed in parallel with the concept of Financial Defined Contribution. The authors conclude that a good pension system mixes a portfolio of NDC, which is equivalent to a government bond portfolio and FDC, with a portfolio of non-government issues.