A Guide to Cash Balance Plans

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2. What is a Cash Balance Plan? A cash balance plan is a defined benefit retirement plan that expresses the retirement benefit in terms that are more characteristic of a defined contribution plan; for example a profit sharing plan. In other words, a cash balance plan communicates the promised benefit to employees as an account balance rather than an annual amount payable for life. heartcg.com

3. How Does A Cash Balance Plan Work? Each participant has a notional account that resembles that of a 401(k) or profit sharing plan. This account is credited with contribution credits and interest credits each year. heartcg.com

4. How Is The Cash Balance Plan Similar To A Pension Plan? Provides retirement benefits based on a stated formula. Actuarial calculation of contributions and certifications Annuity benefits must be offered as an option to the participant. Benefits are guaranteed by the Pension Benefit Guaranty Corporation (PBGC). Participants’ benefits are not affected by the actual investment return of the trust. heartcg.com

5. Cash Balance Plan - Benefits for Your Organization Possible opportunity for increased tax deductions Ability to weight benefits toward key employees Incentive for recruiting and retaining the best talent More predictable costs than traditional DB plans heartcg.com

6. Cash Balance Plan - Benefits for Your Employees Fully funded by the plan sponsor Potential to quickly accumulate tax-deferred wealth Hypothetical account balances, making retirement contribution options easy to understand The benefit is portable in the event of a job change or termination heartcg.com

7. Get Help From Heartland Consulting Group, Inc. Heartland Consulting Group works with small and medium-sized businesses ranging from sole-proprietorships to companies with hundreds of employees. For more details, Visit http://heartcg.com/cash-balance-plan heartcg.com