Clear understanding for all
Although the funding of a Cash Balance plan is very similar to that of a Defined Benefit plan, the employee benefit is expressed as a dollar amount. From an employee standpoint, this plan is much easier to understand than a Defined Benefit plan.
From an employer standpoint, a Cash Balance plan is also easier to determine how much it will cost to fund the benefit for each employee. For the small plan market, Cash Balance plans are generally more appropriate for entities that have multiple owners and an employee workforce of less than 25 employees.
For additional information about Cash Balance Plans, contact us!