The assets of a qualified retirement plan are invested in a separate tax entity called a trust. Trusts are tax exempt, unlike for profit corporations.
There are several types of trust structures:
Self Directed or Participant directed – These accounts apply to defined contribution plans that permit participants to choose their personal investments. Typically, this entails a set of mutual funds. However, some plans may offer a self directed brokerage option to allow a greater variety of investment choices.
Trustee directed – This is a requirement for Defined Benefit Plans. For Defined Contribution Plans, this type of set up may be also known as pooled or balance forward.
Hybrid – Some Defined Contribution plans may offer a select few managed account options that are part of a captive pool of assets specific to the plan.