Defined Benefit & Cash Balance Plans

Why a Cash Balance plan vs. traditional plan

  • Better understood by employees
  • More predictable costs
  • Better able to target key staff
  • Ideal for professional groups

Is there a maximum I can contribute each year?

The IRS limits total tax deductible employer contributions for the combined plans (Defined Benefit Pension Plan & 401(k)/PS) to the greater of 25% compensation or the minimum required for the Defined Benefit Pension Plan. As the 1st 6.0% of DC contributions do not count toward the 25% limit, the effectively limit is 31% for non-PBGC covered plans. For PBGC covered plans, the 25% limit does not apply.

Does it matter how old I am?

Yes, the tax deductible contributions vary by age. To view the estimated annual contribution limits download our white paper below.

Looking for help?

Let us know how we can help below or give us a call at (855) 401-GAIN and press option 1.

Free Educational Resources

We've put together resources to help you better understand Cash Balance.