I understand it, but I don't agree with it. Free is not the correct word. I want to know if pension money is considered "free"
It's fine that you don't agree. Others see it differently than you.
And yes, under that thinking, some of that pension may be "free".
Some of it is deferred compensation, some of it is earnings on that deferred compensation.
If you and your employer contributed $100k total to your pension fund and the value of it 30 years later is 900k, then you could say that 100k of it was earned, 900k was "free."
It's not "free" under the way you want to use free, but I can see where he's coming from. It's certainly not earned money. It's money that comes from waiting to take the compensation, and taking it later, due to investing and the time value of money.
Earned money + unearned investment income = total.
You want to say it's all earned (including the unearned part - it's not earned though). He wants to say the unearned part is free (it's not free though).
Neither of you is 'right,' per se, just using different definitions and meanings.