{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/325/965/#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":"325-965","subtopic_title":"Plan Accounting—Health and Welfare Benefit Plans","section":{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"325-965-05-1","para":"05-1","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_2322FF5A-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">This Subtopic provides guidance on investment and insurance contracts for <a href=\"/glossary/h/#health-and-welfare-benefit-plans\" class=\"term\" title=\"Health and welfare benefit plans include plans that provide the following: Any of the following benefits: Medical, dental, visual, psychiatric, or long-term health care Life insurance (offered separately from a pension plan) Certain severance benefits Accidental death or dismemberment benefits. Benefits for unemployment, disability, vacations, or holidays Other benefits such as apprenticeships, tuition assistance, day care, dependent care, housing subsidies, or legal services.\"><span>health and welfare benefit plans</span></a>. </span></span></div></div>","snippet":"This Subtopic provides guidance on investment and insurance contracts for health and welfare benefit plans.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f1460ab6ec09fe34042c770cf01051d999e5ec66f1bd0e5a8538b44b0dfec383","downloaded_from":"2026-09-09T23:48:38.968Z","last_downloaded_at":"2026-09-09T23:48:38.968Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477913","source_sha256":"22bd036dbae1813ebd60bc64f891ef545e57be43bdd114d8fee3ad3cb7cd8214"}},{"citation":"325-965-05-2","para":"05-2","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_232300BE-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\"><a href=\"/glossary/d/#defined-benefit-plan\" class=\"term\" title=\"A defined benefit plan provides participants with a determinable benefit based on a formula provided for in the plan. Defined benefit health and welfare plans—Defined benefit health and welfare plans specify a determinable benefit, which may be in the form of a reimbursement to the covered plan participant or a direct payment to providers or third-party insurers for the cost of specified services. Such plans may also include benefits that are payable as a lump sum, such as death benefits. The level of benefits may be defined or limited based on factors such as age, years of service, and salary. Contributions may be determined by the plan's actuary or be based on premiums, actual claims paid, hours worked, or other factors determined by the plan sponsor. Even when a plan is funded pursuant to agreements that specify a fixed rate of employer contributions (for example, a collectively bargained multiemployer plan), such a plan may nevertheless be a defined benefit health and welfare plan if its substance is to provide a defined benefit. Defined benefit pension plan—A pension plan that defines an amount of pension benefit to be provided, usually as a function of one or more factors such as age, years of service, or compensation. Any pension plan that is not a defined contribution pension plan is, for purposes of Subtopic 715-30, a defined benefit pension plan. Defined benefit postretirement plan—A plan that defines postretirement benefits in terms of monetary amounts (for example, $100,000 of life insurance) or benefit coverage to be provided (for example, up to $200 per day for hospitalization, or 80 percent of the cost of specified surgical procedures). Any postretirement benefit plan that is not a defined contribution postretirement plan is, for purposes of Subtopic 715-60, a defined benefit postretirement plan. (Specified monetary amounts and benefit coverage are collectively referred to as benefits.)\"><span>Defined benefit plans</span></a> provide participants with a determinable benefit based on a formula provided for in the plans, whereas <a href=\"/glossary/d/#defined-contribution-plan\" class=\"term\" title=\"A plan that provides an individual account for each participant and provides benefits that are based on all of the following: amounts contributed to the participant's account by the employer or employee; investment experience; and any forfeitures allocated to the account, less any administrative expenses charged to the plan. Defined contribution health and welfare plans—Defined contribution health and welfare plans maintain an individual account for each plan participant. They have terms that specify the means of determining the contributions to participants' accounts, rather than the amount of benefits the participants are to receive. The benefits a plan participant will receive are limited to the amount contributed to the participant's account, investment experience, expenses, and any forfeitures allocated to the participant's account. These plans also include flexible spending arrangements. Defined contribution postretirement plan—A plan that provides postretirement benefits in return for services rendered, provides an individual account for each plan participant, and specifies how contributions to the individual's account are to be determined rather than specifies the amount of benefits the individual is to receive. Under a defined contribution postretirement plan, the benefits a plan participant will receive depend solely on the amount contributed to the plan participant's account, the returns earned on investments of those contributions, and the forfeitures of other plan participants' benefits that may be allocated to that plan participant's account.\"><span>defined contribution plans</span></a> provide benefits based on amounts contributed to an employee's individual account plus or minus all of the following: </span></span><ol class=\"ol-norm\"><li class=\"li-norm\"><span class=\"linum\">a</span><div class=\"p\"><span class=\"sfragment\" id=\"sfr_232301F4-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Forfeitures </span></span></div></li><li class=\"li-norm\"><span class=\"linum\">b</span><div class=\"p\"><span class=\"sfragment\" id=\"sfr_2323031B-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Investment experience </span></span></div></li><li class=\"li-norm\"><span class=\"linum\">c</span><div class=\"p\"><span class=\"sfragment\" id=\"sfr_23230438-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Administrative expenses. </span></span></div></li></ol></div></div>","snippet":"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 indiv…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:07b28e6216ccd6f12a66a6cdd384dc69a1d2dcc9a63212772d03c22f2392d688","downloaded_from":"2026-09-09T23:48:38.968Z","last_downloaded_at":"2026-09-09T23:48:38.968Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477913","source_sha256":"22bd036dbae1813ebd60bc64f891ef545e57be43bdd114d8fee3ad3cb7cd8214"}},{"citation":"325-965-05-3","para":"05-3","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_2323054A-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">In such defined contribution plans, plan participants have a vested interest in monitoring the financial condition and operations of the plan since they bear investment risk under these plans, and plan transactions can directly affect their benefits (for example, investment mix, and risk and return). </span></span></div></div>","snippet":"In such defined contribution plans, plan participants have a vested interest in monitoring the financial condition and operations of the plan since they bear investment risk under these plans, and plan transactions can d…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4b0dd20c557a31ec55e36cf99f903144d6aced653a3860dc1977d710c00bcaa3","downloaded_from":"2026-09-09T23:48:38.968Z","last_downloaded_at":"2026-09-09T23:48:38.968Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477913","source_sha256":"22bd036dbae1813ebd60bc64f891ef545e57be43bdd114d8fee3ad3cb7cd8214"}},{"citation":"325-965-05-4","para":"05-4","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_23230656-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The Internal Revenue Code generally requires that all investment experience under defined contribution plans be allocated to individual account balances. </span></span></div></div>","snippet":"The Internal Revenue Code generally requires that all investment experience under defined contribution plans be allocated to individual account balances.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:77b68ab8f74f5beed34ecf66f528a8d69979dd6b81e3e9b0b0d4cf9313197609","downloaded_from":"2026-09-09T23:48:38.968Z","last_downloaded_at":"2026-09-09T23:48:38.968Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval 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