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Software for Cash Balance Plans/testing


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yes, but you really need to be careful and have a very solid understand of the testing process.

All the major small plan vendors have a product that is fully capable of handling the testing. They are also fully capable of producing garbage, when given garbage to work with. The user still has to know the difference.

The material provided and the opinions expressed in this post are for general informational purposes only and should not be used or relied upon as the basis for any action or inaction. You should obtain appropriate tax, legal, or other professional advice.

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Understood. We currently do the testing on a spreadsheet, we only have 1 current DB/DC combo. Just thought if we were going to do more, it would be more efficient to have software to do the testing and prepare the reports. We use FT William and I'm fairly sure they do not have a product. Who do you use?

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  • 2 weeks later...

Kravitz has some software also ; I also did some testing for a few DB/DC combos on a spreadsheet and found that designing the spreadsheet itself required some reading and eventually led to a good understanding of the rules ; and so I think the fact that you used a spreadsheet gives you solid footing for your next step .

The few plans that we had were small and being primarily a large plan shop we didn't promote this business ; I enjoyed discrimination testing and probably could have done it full time .

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Don't forget that as a defined benefit plan, the cash balance plan must have an enrolled actuary and is subject to minimum funding and (generally) PBGC premium filings (as well as IRC Section 436 limitations and all else that pertains to defined benefit plans). It's not just a matter of performing non-discrimination testing. Would the enrolled actuary have adequate software for handling the non-discrimination testing as well as all of the funding requirements?

Always check with your actuary first!

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Yes, we do have enrolled Actuaries, but currently only spreadsheets that we do the non-discrimination testing on. We currently only have one cash balance plan, but potential for more. Before we start promoting cash balance plans, we would like some sort of software to back up our spreadsheets and to provide clients better reports.

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without knowing all the facts / how the software handles things

I suspect it may be 'fun' if the db is plan is begin of year val and the dc plan is the usual end of year

I think smoke starts coming out from the back of the computer or the sides or whatever.

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It is fun because the DB plan is accruing for the prior year while the DC plan is performed for that same year. The Relius software recognizes the issue by correctly pairing the plans up based on the year of accrual.

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Tom, there's no smoke or sparkling wires when testing DB plans with end of year valuations only because they don't need to be tested since they are all frozen as of 4/1 due to failure to comply with non-existent 436 end of year valuation AFTAP regs.

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Tom, there's no smoke or sparkling wires when testing DB plans with end of year valuations only because they don't need to be tested since they are all frozen as of 4/1 due to failure to comply with non-existent 436 end of year valuation AFTAP regs.

Do you get to factor Section 436 restrictions into non-discrimination testing? Under normal circumstances, they would not be recognized for minimum funding purposes.

Always check with your actuary first!

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