A cash balance plan is a hybrid plan that maintains a hypothetical employee account balance much like a defined contribution plan but is computed for funding purposes like a defined benefit plan. The hypothetical employee accounts receive an employer contribution based upon an allocation formula, usually a percentage of current compensation. These defined contribution-type account balances grow with an annual âcontributionâ

There are several methods of crediting employer contributions to cash balance plans, including a fixed percentage of earnings and percentages that vary by age, service, or earnings. Let us assist you in finding out if this plan best meets you needs.