cash balance plan(redirected from Cash-Balance Pension Plans)
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Cash Balance Plan
cash balance plan
Cash balance plan.
A cash balance retirement plan is a defined benefit plan that has many of the characteristics of a defined contribution plan.
The benefit that you'll be entitled to builds up as credits to a hypothetical account. The hypothetical account is credited with hypothetical earnings, based on a percentage of your current pay.
These plans are portable, which means you can roll them over from one employer to another when you change jobs. That makes them popular with younger and mobile workers.
But they are often unpopular with older workers whose employers switch from a defined benefit to cash balance plan because their pensions may be less than with traditional defined benefit plans.