Defined Benefit Plans

A company retirement plan in which a retired employee receives a specific amount based on salary history and years of service and in which the employer bears the investment risk. 



A retired employee receives a specific amount based on salary history and years of service.

Defined Benefit plans provide a fixed, pre-established benefit for employees at retirement.  Substantial benefits can be provided and accrued within a short period of time.
 Employers can generally contribute (and therefore deduct) more each year than in defined contribution plans.


Cash Balance Plans - A pension plan under which an employer credits a participant's account with a set percentage of his or her yearly compensation plus interest credits. 

- Easy to understand, straight forward hypothetical account balance is established for each participant as follows: Beginning Balance + Contribution Credits (usually defined as a % of pay) + Interest Credits (defined in plan document, guaranteed interest) = Ending Balance.

- Accelerated retirement savings for Owners and Key employees.  Can vary contribution by owner or Key employee.

Related to: Third Party Administrator, TPA, Retirement Plan Consultant, Employer Retirement Plan Consulting, Actuarial Consulting, Pension Consultant, Actuarial Services

Contact us about Retirement Plan Consultants (TPA Services)

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