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Discover the Ideal Cash Balance Plans

Add an Ideal Cash Balance Plan to experience predictable, sustainable, and flexible results. 

What is a Cash Balance Plan?

A Cash Balance Plan is a type of IRS-qualified retirement plan that operates under the rules of a defined benefit plan but gives the appearance of operating more like a defined contribution plan.

The account grows annually by  company contributions and an interest credit, which is guaranteed, rather than being dependent on the plan’s investment performance.  

Cash Balance plans offer Employers significantly larger contributions and tax savings opportunities.

What is the Ideal Cash Balance Plan?

The Ideal Cash Balance Plan balances the consultative options to address contribution concerns, business dynamics, and market fluctuation.  

It is important to avoid the extremes of over or under designed Cash Balance Plan.

  • An under designed plan does not harness proven consultative options and creates a less efficient and less flexible design.
  • An over designed plan employs an abundance of consultative options, some of which may not be proven, creating a less predictable and sustainable plan.

A design that creates reliable and expected annual contribution amounts.

  • Consistent communication from a single point of contact.
  • Consistent annual tax deduction benefits.
  • Consistent annual funding with a 5% interest crediting rate.
  • Reliable benefit outcomes with transparent formulas.

A design that is compatible with company culture and demographic for long-term.

  • Reliable turnaround times from In-house actuarial team.
  • Provide three compatible contributions amounts annually (low, suggested, high).
  • Provide appropriate options during set-up to prevent surprises with funding and compliance.

A design that is adaptable to changing business environment and fluctuation.

  • Provide designs that create up to 90% of contribution efficiency.
  • Provide options to allows for changes in contribution levels.
  • Provide smooth transition when terminating the plan.

Below is an example of how quickly a single Ideal Cash Balance Plan with a 5% interest credit can grow:

Year Pay Credit Interest Credit Rate Rolling Account Balance
2020 $150,000 $0 $150,000
2021 $150,000 $7,500 $307,500
2022 $150,000 $15,375 $472,875
2023 $150,000 $23,643 $646,518
2024 $150,000 $32,325 $828,844

In just five years with one participant, increase assets under management effortlessly by offering Trinity’s Ideal Cash Balance Plans. 

Click here to see which Industries are most likely to adopt an Ideal Cash Balance Plan

About the author

Heather Craigg