A cash balance plan is a defined benefit plan that acts somewhat like a defined contribution plan.

Question

Quizplus · Accepted Answer

A prominent hybrid pension plan,a cash balance plan,is a defined benefit plan that acts somewhat like a defined contribution plan.The employer makes regular,defined contributions and guarantees a benefit amount to employees based on an established formula. These benefits are maintained in individual accounts and are expressed in terms of an accumulated lump sum,a cash balance,rather than as a periodic payment during retirement.

A Cash Balance Plan Is a Defined Benefit Plan That