A "cash balance" retirement plan is a type of

Question

Quizplus · Accepted Answer

A cash balance retirement plan is a type of defined benefit plan that defines the retirement benefit in terms of an account balance, rather than an annual benefit based on years of service and final salary. The employer contributes a fixed percentage of an employee's salary to the employee's account each year, and the account earns a fixed rate of interest. At retirement, the employee can take a lump sum payment or an annuity based on the account balance.

A "Cash Balance" Retirement Plan Is a Type of