Cash Balance Spotlight

A Cash Balance Plan is a hybrid plan that combines elements of both a Defined Benefit Plan and a Defined Contribution Plan. This design may be easier to understand and communicate than a traditional defined benefit plan because the benefit is communicated as an account balance, similar to a 401(k) plan, with annual contributions and interest credits that grow the account balance over time.

Cash Balance plans are especially effective for high-income business owners and partnerships, offering tiered benefit levels that maximize accruals for targeted individuals. By combining the generous contribution limits of a Cash Balance plan with a 401(k) and profit-sharing plan, you can provide significant tax-deferred retirement savings for your workforce.

Defined Benefit Plans: A Strategic Tool for Building Retirement Security

Defined Benefit and Cash Balance plans offer significantly higher potential retirement contributions compared to a traditional 401(k) plan. These plans can be especially valuable for business owners and other key employees looking to accelerate savings as they approach retirement. Under current rules, an individual can accumulate up to approximately $3.5 million in a Defined Benefit plan, with annual contribution limits increasing with age.

At Ekon, we work with businesses of all sizes to design retirement plans that balance the needs of owners and employees alike. Our actuaries and plan specialists make it easier to manage these plans so you can stay focused on your business. Let’s talk about how a Defined Benefit or Cash Balance plan can support your long-term goals—both for you and your team.

Reward Your Employees for Their Service

At Ekon, we offer two types of defined benefit plans: traditional pension plans and cash balance plans.

Learn More About Our Plans

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Or write to info@ekonbenefits.com