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Cash Balance Plans

Cash Balance Plans are most suitable for:

Cash Balance Plans are most suitable for:

  • Partners or owners who are looking to contribute more than $69,000 per year to their retirement accounts
  • Companies that contribute 3-4% to employees, or at least willing to do so.
  • Companies that have a consistent profit patterns.
  • Partners or owners over 40 years of age who want to “catch up” or accelerate their retirement savings.

Bridge Benefits Group provides access to custom designed Cash Balance Plans that fit your company needs. Our knowledge of the retirement plan market allows us to find the most appropriate benefits that fit your need. As investment co-fiduciaries on all our plans, you can be assured we are always striving to act in your best interest to help ensure you are compliant with Department of Labor guidelines.

About Cash Balance Plans

A cash balance plan is a type of defined benefit plan that operates like a profit-sharing plan. With a cash balance plan, each participant has a hypothetical account. This account is not allocated within the trust; instead, record keeping is done separately by the plan
actuary as an accounting function.

The accounts grow in two ways. First, the company contribution is determined by a formula specified in the plan document. It can be a percentage of a pay or a flat dollar amount and can be different for each individual class. Second, the account grows with an annual interest credit. The rate of return is specified and is not dependent on the plan’s investment performance.


This information was developed as a general guide to educate plan sponsors, but is not intended as authoritative guidance or tax or legal advice.  Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation.  In no way does advisor assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations.

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