Guest kdickel Posted June 17, 1999 Share Posted June 17, 1999 I am looking for a definition of cash balance plans and and explanation of how they work. Also, the difference between cash-balance and other pension forms. Plus and minuses of cash-balance for employee/employer. Any other web sites where I can obtain info on this topic. Link to comment Share on other sites More sharing options...
Everett Moreland Posted June 18, 1999 Share Posted June 18, 1999 http://www.cashpensions.com/ Link to comment Share on other sites More sharing options...
Guest Mike Melnick Posted June 30, 1999 Share Posted June 30, 1999 There is a definition of cash balance plans in IRS Notice 96-8 which is, "a cash balance plan is a defined benefit pension plan that defines benefits for each employee by reference to the amount of the employee's hypothetical account balance. An employee's hypothetical account balance is credited with hypotherical allocations and hypothetical earnings determined under a formula selected by the employer and set forth in the plan." The limitation of this definition is that it does not really explain what is meant by "hypothetical". Basically this means that if you add up all the account balances, the total is not going to match the actual assets in the trust. In other words, the "interest credits" and "contribution credits" earned by the individual participant are not based on allocating the actual investment earnings and contributions. Link to comment Share on other sites More sharing options...
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