Cash balance plans are defined benefit plans with features similar to those of a defined contribution plan however, there are a few exceptions. What is a difference is particular to a cash balance plan?

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The difference particular to cash balance plans and not shared with defined benefit plans is that cash balance plans creates a separate account established for each participant using a hypothetical account balance. This is the only exception to their likeness to include: a) neither plan is portable b)retirement benefits/distributions are not adjusted for cost of living c) both use the Pension Benefits guaranty Corporation d )forfeitures must be used to reduce employer's contribution e) plans are more beneficial to younger participants f) neither plan have inexpensive.

Cash Balance Plans Are Defined Benefit Plans with Features Similar