A cash balance plan is
A)A defined benefit plan that expresses the promised benefit in terms of a stated account balance
B)A defined benefit plan that expresses the promised benefit in terms of a specific monthly benefit
C)A defined contribution plan that expresses the promised benefit in terms of a stated account balance
D)A defined contribution plan that expresses the promised benefit in terms of a specific monthly benefit

Question

Quizplus · Accepted Answer

A cash balance plan is a defined benefit plan that expresses the promised benefit in terms of a stated account balance.
Key Takeaway: A cash balance plan is a defined benefit plan, but it doesn't express the promised benefit in terms of a specific monthly benefit (like other defined benefit plans do). A cash balance plan is not a defined contribution plan.

A Cash Balance Plan Is