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A cash balance plan is a defined benefit retirement plan that maintains hypothetical individual employee accounts like a defined contribution plan.The hypothetical nature of the individual accounts was crucial in the early adoption of such plans because it enabled conversion of traditional plans without declaring a plan termination.
The cash balance plan typically offers a lump sum at and often before normal retirement age. However, as is the case with all defined benefit plans, a cash balance plan must also provide the option of receiving the benefit as a life annuity. The amount of the annuity benefit must be definitely determinable as per IRS regulation 1.412-1.
Pension administration in the United States is the act of performing various types of yearly service on an organizational retirement plan, such as a 401(k), profit sharing plan, defined benefit plan, or cash balance plan. Increasingly, employers are also implementing these plan types in combination arrangements for greater contribution ...
One common question that arises when leaving a job is whether you can cash out your defined benefit pension plan. Defined benefit pension plans, often referred to as traditional pension plans ...
I currently have $680,000 in a 401(k), $150,000 in savings and a pension of $1,600 per month. Can I retire at age 62? – Hieu This is a good question and the answer depends primarily on what your ...
Defined benefit (DB) pension plan is a type of pension plan in which an employer/sponsor promises a specified pension payment, lump-sum, or combination thereof on retirement that depends on an employee's earnings history, tenure of service and age, rather than depending directly on individual investment returns. Traditionally, many governmental ...
A cash-out refinance offers benefits like access to money at potentially a lower interest rate, plus tax deductions if you itemize. On the down side, a cash-out refinance increases your debt ...
The firm was founded in 1944 by H. Charles "Chick" Kwasha and Maurice Lipton. [citation needed] Kwasha Lipton is best known for creating a type of defined benefit pension plan called a cash balance plan (CBP), which it designed for the employees of Bank of America in 1985.