metsfan026 Posted September 7, 2023 Posted September 7, 2023 I know it's likely an inexact answer, but I've had people tell me different things. What is the approximate maximum benefit credit you can get in a Cash Balance Plan? Just a ballpark number that you could tell someone when discussing the design. Obviously there are a lot of variables, but just trying to make it easy for someone to understand who doesn't have much knowledge. Thanks!
Effen Posted September 7, 2023 Posted September 7, 2023 $3.4 M @ 62 w/ 10 Years of Participation and Ave Comp > $265K (2023 limits) Lots of variables as you said. CuseFan, david rigby, Luke Bailey and 1 other 4 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.
Lou S. Posted September 7, 2023 Posted September 7, 2023 In simple terms, that could possibly get you in trouble, it's essentially based on funding for the lump sum equivalent of the 415(b) maximum annuity. The age, service,salary of the participant and actuarial factors of the plan among other variables can all impact it. CuseFan and Luke Bailey 2
CuseFan Posted September 7, 2023 Posted September 7, 2023 Also note the maximum LS changes depending on when it is paid - and with CBPs that is usually the concern, the maximum lump sum as opposed to the maximum benefit. Effen gave the correct general stock answer and that is the starting point but unless you check all the boxes - 10+ YOP, FAE >= $265K, NRA 62 and distribution at age 62, then you're looking at something different. And if you're looking into the future, then IRS limit increases come into play, as could post-65 actuarial increases. Assemble all the facts and future expectations of the situation you're dealing with and then you can craft an answer/approximation/range that applies most appropriately to that situation. Luke Bailey 1 Kenneth M. Prell, CEBS, ERPA Vice President, BPAS Actuarial & Pension Services kprell@bpas.com
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