The sector for private defined contribution (DC) pension plans includes the assets of DC plans sponsored by private employers for the benefit of their employees and retirees. Under a DC plan, the most common of which is the 401(k) plan, employers and workers contribute funds to individual accounts established for each participant. Workers typically direct the investments, and they may withdraw or transfer the assets after age 59-1/2 or after separating from the employer. The sector includes all DC "qualified plans" that are required to file form 5500 with the Internal Revenue Service, the Department of Labor, and the Pension Benefit Guaranty Corporation. It also includes College Retirement Equities Fund (CREF) plans, which typically cover academic and nonprofit employers.
This sector does not include individual retirement accounts or Keogh plans. In addition, unallocated insurance contracts held at life insurance companies, such as variable annuities and guaranteed investment contracts, are included in the private DC pension sector rather than in the life insurance company sector.
The liabilities of the private DC pension sector are equal to the value of the assets. These liabilities are assets of the household sector.
These data are a component of total private pension funds shown on tables F.116 and L.116.