The sector for private pension funds includes defined benefit (DB) and defined contribution (DC) plans offered to employees of private-sector employers. The sector includes all "qualified plans" required to file form 5500 with the Internal Revenue Service, the Department of Labor, and the Pension Benefit Guaranty Corporation.
The sector does not include individual retirement accounts, Keogh plans, or pension plans for government workers, which are reported in other sectors. Also excluded are DB assets that have been transferred to insurance companies for the purposes of paying pension benefits to retirees; those assets are included in the life insurance sector. However, unallocated insurance contracts held at life insurance companies, such as variable annuities and guaranteed investment contracts, are included in the sector for private pension funds rather than in the sector for life insurance companies.
Liabilities of private pension funds are equal to the actuarial liabilities of DB plans (that is, accrued benefits to be paid in the future) and the assets of the DC plans. Underfunding of DB plans is included as an asset of the plans and is shown on the table as "claims of pension fund on sponsor". The sponsor is assumed to be a nonfinancial corporate business. Pension entitlements are assets of the household sector.
A memo item at the bottom of the table shows total financial assets of DB and DC plans. Detailed financial asset data can be found separately for private DB plans on tables F.117.b and L.117.b and for private DC plans on table F.117.c and L.117.c.
Another memo item on L.117 shows the funding status of the DB plans.