By Jeff Thornton FSA, EA, MAAA Actuary, The Retirement Advantage, Inc.(TRA), as seen in the Fall 2020 Plan Consultant Magazine
Cash balance plans are designed to look like an account-based plan such as a 401(k) plan, but they are technically defined benefit plans, also known as “pension plans”. Defined benefit plans are subject to rules and regulations that dictate how much can or must be contributed. A minimum required contribution and a maximum deductible contribution are calculated annually to ensure that the plan is not too underfunded or too overfunded. This article is designed to provide a high level overview of cash balance funding issues.
Click here to view the article published in the Fall 2020 edition of Plan Consultant Magazine.
