The term individual policy pension trust refers to a retirement plan that also includes life insurance policies for participants. The life insurance policies held in individual policy pension trusts are purchased and held in trust by employers.
Typically used by smaller employers, an individual policy pension trust provides employees with both retirement benefits as well as life insurance. These plans are managed by a trustee that is authorized to purchase life insurance policies on behalf of participants. Both the retirement assets, as well as the life insurance policies, are held in trust by the employer, who also funds the program.