CASH BALANCE PLANS are defined benefit plans, with the look and feel of defined contribution (401(k)-style) plans. They need all the same actuarial services as traditional pension plans (annual valuations, government filings etc.) – and then some.
Above all, cash balance plans need to be designed well. This is especially true for professional firms, where big tax deductions and stable funding are a primary concern. We’ve worked with cash balance plans for over 20 years, and can help you find the optimal solution for your business.
We’ll work with you to design a plan that meets your objectives while complying with all of the IRS rules: §401(a)(4) nondiscrimination testing (usually cross testing), §401(a)(26) minimum coverage testing (the 40% / 50-employee “meaningful benefit” rule), and §411(b) accrual rule testing. It can look intimidating, but we love this stuff and will take care of the details.
© 2011 Northern Consulting Actuaries, Inc. dba Van Iwaarden Associates.