A “cash balance plan” is a defined benefit pension plan under which a participant’s retirement benefits are determined on the basis of a hypothetical account that is typically determined in a manner similar to accumulations under a defined contribution plan. A cash balance plan is one category of plan design within a broader class generally spoken of as “hybrid plans,” referring to defined benefit plans that rely on non-traditional methods for determination of a plan participant’s benefits.
Key Source Documents
- Berger v. Xerox Corporation Retirement Income Guarantee Plan, CA7, No. 00-584-DRH, 8/1/03.
- Campbell v. BankBoston, N.A., CA1, No. 02-1695, 3/7/03.
- Cooper et al. v. the IBM Personal Pension Plan and IBM Corporation, S.D.Ill., No. 99-829-GPM, 7/31/03.
- Eaton v. Onan, S.D.Ind., IP97-0814-C-H/G, 9/29/00
- Lyons v. Georgia Pacific Corporation Salaried Employees Retirement Plan, CA11, No. 99-10640, 8/11/00.
- Tootle v. ARINC, Md, Civ.No. CCB-03-1086, 6/10/04.
Department of the Treasury
- JS-1132 (2/2/04) – Preserving Cash Balance Plans for Workers: Treasury Proposes Legislation to Protect Defined Benefit Plans and Ensure Fair Treatment of Older Workers in Cash Balance Conversions.
- JS-172 (4/9/03) – Fact Sheet: Cash Balance Plans.
- LS-108 (9/21/99) – Testimony by Benefits Tax Counsel J. Mark Iwry before the Senate Committee on Health, Education, Labor and Pensions: Cash Balance and other Hybrid Pension Plans.
Internal Revenue Service
- Notice 96-8 – Determining amount of single sum distributions from cash balance plans.
- Ann. 2004-80 – Replacement instructions for the 2003 Schedule B relating to special information for cash balance plans
- Ann. 2004-57 – Withdrawal of 2002 proposed regulations; suspension of determination letter review for cash balance conversions.
- Section 401(a)(26) Issue Arising in Cash Balance Plan Determination Letter Applications – Memorandum for Manager, EP Determinations Quality Assurance (6/6/03)
- Relationship between Revenue Ruling 2001-62 and Cash Balance Pension Plans
- Employee Plans Continuing Professional Education (CPE) Technical Instruction Program for Fiscal Year 2004 – Cash Balance Plans
DOL – EBSA
- Cash Balance Plans Questions & Answers (11/99)
- FAQs about Cash Balance Plans
- Fact Sheet: Cash Balance Pension Plans (5/03)
Pension Benefit Guaranty Corporation
- PBGC Seeks Public Comment on How to Value Cash Balance Plans with Variable Indices [No. 00-32 (7/5/00)]
Bureau of Labor Statistics
- Cash Balance Plans: The New Wave; Elliott, Moore.
General Accountability Office
- GAO – Information on Cash Balance Pension Plans [GAO-06-42 (10/05)]
- GAO – Department of the Treasury, Internal Revenue Service: Statement in Preamble to Regulations That Cash Balance Plans Are Not Age-Discriminatory [GAO-01-511R (3/01)]
- GAO – Implications of Conversions to Cash Balance Plans [HEHS-00-185 (9/00)]
- GAO – Cash Balance Plans: Implications for Retirement Income [HEHS-00-207 (9/00)]
Congressional Research Service
- Cash Balance Pension Plans: Selected Legal Issues, RS22214, 7/29/05. (Note – This CRS report is said to have been updated in late 2005 to reflect further litigation developments.)
Financial Accounting Standards Board
- Scope, Effective Date, and Implementation Issues – Relating to accounting guidance for cash balance plans. Minutes of 5/12/04 Board meeting.
American Academy of Actuaries
- When Your Retirement Plan Changes: Understanding Your Cash Balance Plan (2000)
- Correspondence regarding GAO report on “Information on Cash Balance Pension Plans” (11/28/05). GAO response listed above with the relevant GAO report.
- Correspondence to FASB suggesting cost attribution methods for cash balance plans (8/20/02)
American Benefits Council
- Retirement: Cash Balance – Index of ABC materials
American Institute of Certified Public Accountants
- Cash Balance Conversions; Arcady, Mellors; Journal of Accountancy, 2/00.
- Litigation Issues in Cash Balance Plans – Guest article by Howard Shapiro and Robert Rachal (1999)
Chamber of Commerce
Employee Benefit Research Institute (EBRI)
- Cash Balance Pension Plans and Other Hybrid Retirement Plans – Fundamentals of Employee Benefit Programs; Chapter 10 (1997)
ERISA Industry Committee
- Cash Balance Plans
- Amici Curiae Brief on appeal of Cooper v. IBM, supporting reversal (11/4/05)
- Executive Summary: Hybrid Pension Plans Do Not Discriminate Against Older Workers (8/21/03)
- Correspondence to FASB: EITF Decisions Regarding Issue 03-4, “Determining the Classification and Benefit Attribution Method for a ‘Cash Balance’ Pension Plan” (5/23/03)
Society of Actuaries
- Actuarial Aspects of Cash Balance Plans
- Economic Design of Cash Balance Pension Plans, Gold.
- The Emergence of Hybrid Pensions and Their Implications for Retirement Income Security in the 21st Century, Clark, Scheiber.
- The Cash Balance Funding Method, Murphy.
- CCA Strategies, LLC – Special Topic – Cash Balance Plans
- Gottesdiener Law Firm, PLLC – What Is a Cash Balance Pension Plan?
- Watson Wyatt Worldwide