Cash Balance

Cash Balance Pension Plan

There are many retirement options available for your customers, so let Compass help break them down for you. A cash balance plan is a defined benefit (DB) plan that operates similar to a profit sharing plan where a participant’s account grows annually through contributions and interest credits. In a DB plan the interest credit is guaranteed and is not dependent on the plan’s investment performance. These plans are ideal for business owners, partnerships and companies with many Highly Compensated Employees (HCEs) as it allows for higher annual contributions than 401(k)s and offers flexibility for increased tax efficiency, especially for companies with strong cash flow. Additionally, the plan’s assets are invested by the plan’s fiduciary or trustee, providing control of the overall investment strategy.

Lucky for your clients, Compass has extensive experience working with Cash Balance and Defined Benefit Pension Plans (150+ plans). Our specific services include:

  • Complex plan design and review
  • Cost estimates and plan redesign proposals
  • Full range of actuarial services, including annual actuarial valuations that monitor the plan’s funded status and cash contribution requirements
  • Special early retirement windows