Cash Balance Funding Issues

 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.


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