A Guide to Cash Balance Plans
A cash balance plan is a type of employer-sponsored defined benefit retirement plan. To know more, visit http://heartcg.com/cash-balance-plan
A cash balance plan is a type of employer-sponsored defined benefit retirement plan. To know more, visit http://heartcg.com/cash-balance-plan
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What is a <strong>Cash</strong> <strong>Balance</strong> Plan?<br />
A cash balance plan is a defined benefit retirement plan that expresses the<br />
retirement benefit in terms that are more characteristic of a defined contribution<br />
plan; for example a profit sharing plan.<br />
In other words, a cash balance plan communicates the promised benefit <strong>to</strong><br />
employees as an account balance rather than an annual amount payable for life.<br />
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How Does A <strong>Cash</strong> <strong>Balance</strong> Plan Work?<br />
Each participant has a notional account that resembles that of a 401(k) or profit<br />
sharing plan. This account is credited with contribution credits and interest<br />
credits each year.<br />
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How Is The <strong>Cash</strong> <strong>Balance</strong> Plan Similar To A Pension Plan?<br />
Provides retirement benefits based on a stated formula.<br />
Actuarial calculation of contributions and certifications<br />
Annuity benefits must be offered as an option <strong>to</strong> the participant.<br />
Benefits are guaranteed by the Pension Benefit Guaranty Corporation (PBGC).<br />
Participants’ benefits are not affected by the actual investment return of the trust.<br />
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<strong>Cash</strong> <strong>Balance</strong> Plan - Benefits for Your Organization<br />
Possible opportunity for increased tax deductions<br />
Ability <strong>to</strong> weight benefits <strong>to</strong>ward key employees<br />
Incentive for recruiting and retaining the best talent<br />
More predictable costs than traditional DB plans<br />
heartcg.com
<strong>Cash</strong> <strong>Balance</strong> Plan - Benefits for Your Employees<br />
Fully funded by the plan sponsor<br />
Potential <strong>to</strong> quickly accumulate tax-deferred wealth<br />
Hypothetical account balances, making retirement contribution options easy<br />
<strong>to</strong> understand<br />
The benefit is portable in the event of a job change or termination<br />
heartcg.com
Get Help From Heartland Consulting Group, Inc.<br />
Heartland Consulting Group works with small and medium-sized businesses ranging<br />
from sole-proprie<strong>to</strong>rships <strong>to</strong> companies with hundreds of employees.<br />
For more details,<br />
Visit http://heartcg.com/cash-balance-plan<br />
heartcg.com