{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/325/962/#05-overview-and-background","source":"FASB Accounting Standards Codification, Basic View","usage":"Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.","topic":"325","topic_title":"Investments—Other","subtopic":"325-962","subtopic_title":"Plan Accounting—Defined Contribution Pension Plans","section":{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"325-962-05-1","para":"05-1","html":"
This Subtopic provides guidance on investments for defined contribution pension plans. In particular, this Subtopic provides guidance on the reporting of investment and insurance contracts held by defined contribution pension plans.
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Defined benefit plans provide participants with a determinable benefit based on a formula provided for in the plans, whereas defined contribution plans provide benefits based on amounts contributed to an employee's individual account plus or minus the following:
  1. a
    Forfeitures
  2. b
    Investment experience
  3. c
    Administrative expenses.
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The Internal Revenue Code generally requires that all investment experience under defined contribution plans be allocated to individual account balances.
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A defined contribution plan provides for participant-directed investment programs if it allows participants to choose among various investment alternatives. The available alternatives are usually pooled fund vehicles, such as registered investment companies or commingled funds of banks, that provide varying kinds of investments—for example, equity funds and fixed income funds. The participant may select among the various available alternatives and periodically change that selection.
","snippet":"A defined contribution plan provides for participant-directed investment programs if it allows participants to choose among various investment alternatives. The available alternatives are usually pooled fund vehicles, su…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:19fa9f34e4d9c43c44274bdcd76599561a06d839eedca116311b3ba6a6915c7c","downloaded_from":"2026-09-09T23:48:16.270Z","last_downloaded_at":"2026-09-09T23:48:16.270Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477443","source_sha256":"4916fa49a616ea5d6722512ce7de8d9ee32503411e71d3ea9d39db8b14132de6"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:460f6711eb85911e3af9ce37b292d09800b3fff2d1b16c16a89825a921e45a08","downloaded_from":"2026-09-09T23:48:16.270Z","last_downloaded_at":"2026-09-09T23:48:16.270Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477443","source_sha256":"4916fa49a616ea5d6722512ce7de8d9ee32503411e71d3ea9d39db8b14132de6"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4a05d744af549b461b48598a62bdcda5cc4569b5fc7a1a662fd289358afb89bc","downloaded_from":"2026-09-09T23:48:16.270Z","last_downloaded_at":"2026-09-09T23:48:16.270Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477443","source_sha256":"4916fa49a616ea5d6722512ce7de8d9ee32503411e71d3ea9d39db8b14132de6"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4a05d744af549b461b48598a62bdcda5cc4569b5fc7a1a662fd289358afb89bc","downloaded_from":"2026-09-09T23:48:16.270Z","last_downloaded_at":"2026-09-09T23:48:16.270Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477443","source_sha256":"4916fa49a616ea5d6722512ce7de8d9ee32503411e71d3ea9d39db8b14132de6"}}