Blogging Employee Benefits

Fugue: Cash Balance Plans

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.

Pending Cash Balance Plan Legislation [2006]

Key Source Documents

Litigation

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

DOL – EBSA

Pension Benefit Guaranty Corporation

EEOC

Bureau of Labor Statistics

General Accountability Office

Congressional Research Service

Financial Accounting Standards Board

Additional References

AARP

American Academy of Actuaries

American Benefits Council

American Institute of Certified Public Accountants

BenefitsLink

Chamber of Commerce

Employee Benefit Research Institute (EBRI)

ERISA Industry Committee

Society of Actuaries

Other Entities

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