When we are talking about tax savings, the cash balance plan will look a lot like your defined contribution plan—think 401(k). In reality, a cash balance pension plan is a defined benefit plan.

Cash Balance Pension Plan vs. 401(k) The most significant difference between a cash balance pension and a 401(k) is that the employer bears the investment risk in a CBP.

Cash balance plans offer business owners and high-income professionals a powerful way to significantly boost retirement ...

Let’s say, for example, a participant has a cash balance in the plan of $200,000 upon retiring at age 67. The individual has a right to an annuity based on that amount. However, under most CBP plans, ...

A cash balance plan resembles a defined contribution plan in that each employee has a hypothetical account, or “cash balance,” to which contributions and interest payments are credited.

The traditional cash balance plan provides stable but modest growth tied to 30-year Treasury yields (1.67% to 4.15% during the years in question), while the market-based cash balance plan ...

In addition, some employers require those with small cash balance pension benefits (say under $10,000) to exit the plan — either in lump sum or IRA rollover — when separating from service ...

Starting five years before her retirement, she could set up a cash balance plan, sell an extra $200,000 of grain each year and have an offsetting cash balance plan deduction to offset the grain sales.

Cash balance plans have exploded in popularity and now hold more than $1 trillion of wealth. The plans are complicated. They have some features in common with 401(k)s, even though they are ...