Question: Our business is considering adding a cash balance plan to our benefits package. Do you have current data on the popularity of these plans?
Answer: Although traditional Defined Benefit plans have fallen out of favor due to several factors, employers still recognize the benefits of providing a plan that offers their employees greater security through lifetime income — but without the administrative complexity and funding risk. As a result, Cash Balance plans have become an attractive option. According to a new report from October Three, over the last decade, cash balance plans in the United States increased by nearly 70%, whereas traditional Defined Benefit plans fell by more than 50%. The health care sector accounts for nearly one-third of cash balance plans, followed by professional services and legal services firms, which together account for another 20% of cash balance plans.
To learn more about the advantages of Cash Balance Plans, click here.
