Cash Balance Questions

[maryflemingphr@yahoo.com]

All of my research and in my experience working in a prior job says cash balance is a qualified plan that has to pass testing.  Has anyone ever heard of an executive cash balance plan?   Can a plan sponsor designate only HCEs and/or executives for a cash balance plan?

[Mike Preston]

The cash balance plan can be aggregated with other plans of the employer to pass testing. An executive cash balance plan is quite common.

[fmsinc]

I can tell you that not one case in any state or Federal court in the United States has ever used the phrase "Executive Cash Balance Plan". 

Nowhere on the Department of Labor website (including the EBSA) does the phrase "Executive Cash Balance Plan" appear.

So perhaps "Executive" just defines the characteristics of the Participants and not the nature of the Plan itself.  I suspect it's just a plain vanilla Cash Balance Plan.  https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/cash-balance-pension-plans

[LRRichey]

Just a guess, but it is probably just a marketing name given to an executive only 409A NQDC design using a DB design floated out of the contributions into a COLI; hence mirroring a qualified cash balance design.  It is probably using a newer life insurance product, like an indexed product, but not necessarily since the recent update in the interest rate assumptions in Section 7702 definition of life insurance that places WL products back in the game for such designs.  

[Mike Preston]

The term executive plan is meant to communicate the fact that the participants are primarily executives. No insurance products. Definitely a qualified plan. Nothing to do with a non-qualified deferred compensation arrangement. No 409a issues because it's not a 409a plan.