What is a DC reversion?

A DC reversion refers to a situation where a defined contribution pension plan, typically funded by employee and employer contributions, reverts back to the employer or plan sponsor under certain conditions, such as plan termination or surplus funds. This can occur if the plan has excess assets after all liabilities to participants are settled. DC reversion is often regulated to protect the interests of plan participants and ensure that funds meant for retirement are not unjustly retained by the employer.