Cash Balance Pension Plans

Cash Balance Pension Plans

Cash balance pension plans are a type of retirement plan that combines features of both traditional defined benefit plans and defined contribution plans. A cash balance plan is an IRS-qualified retirement plan known as a “hybrid” plan. Each employee, or participant, receives a contribution to an account and it grows in two ways: by an employer contribution and by an interest credit, which is guaranteed rather than dependent on the plan’s investment performance.

Our approach for Cash Balance Pension Plans

Here are some general considerations that employers may need to take into account when setting up a cash balance pension plan:

Plan Design:

The plan should be designed to meet the employer's goals and to comply with regulations. The design may include factors such as the contribution amount, vesting requirements, and distribution rules.


Cash balance pension plans are subject to various regulations, including the Employee Retirement Income Security Act (ERISA). Employers need to ensure they comply with all applicable laws and regulations.


Cash balance pension plans require ongoing administration to ensure compliance with regulations and to manage employee accounts. Employers may need to hire an outside administrator or allocate resources internally to manage the plan.


Employers need to contribute sufficient funds to the plan to meet their obligations to employees. The contribution amount will depend on factors such as the plan design, the number of employees, and the employer's financial goals.

Predictable Costs:

Our Cash Balance plan solutions provide plan sponsors with consistent, predictable, cashflow expenses year-over-year.

Long – Term Solutions:

We design solutions that fit both participants and plan sponsors needs today as well as their goals and objectives for tomorrow.


Our Cash Balance plan designs are easy to understand by participants. Account balances grow each year with contributions and earnings, just like a 401(k) plan.

Benefits of Cash Balance Pension Plans


Large contributions and the miracle of compound interest can help grow your portfolio very quickly.

Contribute More

Cash Balance Plans allow for significantly higher contribution limits that increase with age and create great incentives.

Tax Incentives

Cash balance plan contribution reduce taxable income to the employer which helps minimize tax payments to the IRS.

Interest Credits

Each participant’s hypothetical account balance will grow
at a stated interest rate
every year.

Cash Balance Plans FAQ's

Each participant has an account which grows annually in two ways: first, a contribution and second, an interest credit, which is guaranteed rather than dependent on the plan’s investment performance

 Yes, but with restrictions.

Yes, like any other qualified plan, a Cash Balance Plan is subject to nondiscrimination testing.

No. Each participant can have a different amount contributed for them.

 Both employers and employees may participate in this plan.

Pension Group Inc. knows how it important it is to have a great retirement plan like a Cash Balance Plan. Explore our services and contact us today for a complimentary consultation!

Contact Us for Cash Balance Pension Plans

Whether you’re ready to take the first steps toward financial freedom or are interested in learning more, please feel free to reach out to our dedicated team at Pension Group Inc. today. Let us discover how to make the most out of your financial future, together.