High Contribution Opportunities with Cash Balance Plans

High Contribution Opportunities with Cash Balance Plans

Cash balance plans credit pay credits and interest credits to notional accounts; they remain defined benefit plans subject to funding rules.

How Cash Balance Works

Cash balance plans credit pay credits and interest credits to notional accounts; they remain defined benefit plans subject to funding rules.

Who They Suit

Profitable firms with stable cash flow

Owners seeking six‑figure deductible contributions

Practices with older owners and younger staff demographics

Implementation Checklist

Coordinate with actuary, adopt funding policy, and align with 401(k) for combined plan testing and benefits.

Plan Sponsor Action Checklist

Checklist

Request contribution ranges from your actuary before year‑end.
Checklist

Define an investment and funding policy statement.
Checklist

Coordinate combined plan testing with your TPA/recordkeeper.
Need help? Our team can assist with plan design, testing, and filings.
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References

  • DOL Cash Balance fact sheet; IRS chapter on cash balance plans.