A cash balance plan is a type of defined benefit plan (hybrid plan) that features characteristics of a defined contribution plan
Individual account balances
Portable accounts: Roll over into IRA upon leaving ERISA rules apply
A cash balance plan allows for much larger pre-tax contributions than defined contribution plans
A cash balance plan is especially attractive for closely-held firms or businesses
Plan designed to meet partners/shareholders objectives.
Best for individuals with high capacity for tax deferred saving.
Safe-harbored by the Pension Protection Act of 2006
Provided resolution to potential earlier legislative concerns.
Set “rules of the road”