Life insurance reserves are funds that have been set aside to back claims against policies issued. Life insurance reserves are assets of the households and nonprofit organizations, U.S.-chartered depository institutions, and holding companies sectors and liabilities of life insurance companies and the federal government. In the flow of funds accounts, the liability of private life insurance companies for life insurance reserves is equal to the sum of reserves for life insurance policies and reserves for supplementary contracts; the liability does not include reserves for annuities, health insurance, or policy dividend accumulations. The liability of the federal government is equal to the total assets of several U.S. government life insurance funds.
Pension fund reserves are funds that have been set aside to meet obligations under annuity contracts and pension plans. All pension fund reserves are assets of the sector for households and nonprofit organizations. They are liabilities of life insurance companies, private pension funds, state and local government employee retirement funds, and the federal government retirement funds. For private pension funds, state and local government retirement funds, and federal government retirement funds, the liability is equal to the total assets of the sector.
For the federal government, the pension fund liability is equal to assets held in the Thrift Savings Plan and the National Railroad Retirement Investment Trust, as well as nonmarketable government securities held by the civil service retirement and disability fund, the Railroad Retirement Board, the judicial retirement fund, the military retirement fund, and the foreign service retirement and disability fund. The civil service retirement fund covers the Civil Service Retirement System (CSRS)--a defined benefit plan covering federal employees hired before 1984--and the Federal Employees Retirement System (FERS)--a defined benefit plan, supplemental to Social Security, for federal employees hired after 1983 and for employees formerly covered by CSRS who elected to join FERS. FERS also has the Thrift Savings Plan--a defined contribution plan. Federal government pension fund reserves do not include the reserves of the Social Security system.
For life insurance companies, the liability is equal to policy reserves behind individual and group annuities, excluding unallocated insurance company contracts held for private pension funds in the name of individuals who are not separately identified. Individual retirement accounts and Keogh accounts that are invested in annuities (see tables F.225.i and L.225.i) are included in the life insurance companies' pension fund reserves liability.