Cash Balance Retirement Plans Surge 17%, Plan Assets Rise to $1.1T
There were 17,812 Cash Balance plans active in 2015, the most recent year for which complete
"Cash Balance plans offer considerable advantages for employers, including the opportunity to double or triple tax-deferred retirement savings," said
Also known as "hybrid" plans, Cash Balance plans combine the high contribution limits of traditional defined benefit plans with the flexibility and portability of a 401(k).
Key findings from the 2017 National Cash Balance Research Report:
- Increasing diversity of companies adopting Cash Balance plans: while medical/dental groups and law firms still make up close to half the market, Cash Balance plans are becoming increasingly popular across the business world, from the technology sector to retail and manufacturing.
- Small business continues driving Cash Balance growth: 92% of Cash Balance Plans are in place at firms with fewer than 100 employees.
- Companies more than double contributions to employee retirement savings when adding a Cash Balance plan: the average employer contribution to staff retirement accounts is 6.6% of pay in companies with both Cash Balance and 401(k) plans, versus 3.7% of pay in firms with 401(k) alone.
IRS regulations allowing broader Cash Balance investment options have accelerated plan growth: the 'Actual Rate of Return' option and other new investment choices approved in the 2010 and 2014 Cash Balance regulations made plans more flexible for employers and removed certain funding issues. The number of large plans using Actual Rate of Return has increased almost 20%.
These and other highlights of the 2017 National Cash Balance Research Report will be discussed in an upcoming Cash Balance Outlook 2017 webcast led by
Download the 2017 National Cash Balance Research Report here.
Register for the Cash Balance Outlook 2017 webinar here.
For more information, call
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