| As a trusted advisor, we stand ready to guide Plan Sponsors through the complexities and everchanging landscape of pension plans. Below find valuable updates from our dedicated Defined Benefit Business Council. Cash Balance Plans Cash balance plans continue to be an area of growing interest and have been a large area of new plan growth. Cash balance plans now represent more than half of all defined benefit plans in existence with approximately 13,000 new plans adopted in the last five years.1 Why the growing interest? – A modern cash balance acts like a 401(k) plan with the advantages of a defined benefit plan. – Cash balance plans can provide a way for highly compensated individuals to defer significantly more income into a qualified retirement vehicle compared to a 401(k) plan alone (~$200,000 + per year for certain individuals). – Cash balance plans avoid the volatility typically associated with traditional defined benefit pension plans. – Cash balance plans can be designed to consider the risk profiles and savings needs of individual participants and/or groups of participants. Read more of our newsletter here… |
Source: 1October Three: Cash Balance Market Snapshot, February 2023
