Is Cash Balance the Right Fit?

Cash Balance Plan SponsorMany owners desire larger tax deductions and accelerated retirement savings. Implementing a cash balance plan may be the best solution for such owners.

Here are five questions to help determine if a company is an ideal candidate for a cash balance plan. If the answer is “yes” to most of these questions, a cash balance plan could be the right plan for you and your practice.

By filling out the following form, the cash balance plan experts at Pinnacle Plan Design will help determine the feasibility of implementing a cash balance plan.

    The defined contribution limits for 2023 are as follows: 401(k) elective deferrals up to $22,500, profit sharing and matching contributions up to $66,000 (including elective deferrals), and catch-up contributions up to $7,500 for participants 50 and older.
    In other words, is there only a handful of employees for every owner?
    With a cash balance plan, profit sharing contributions in the defined contribution plan are no longer discretionary. Employers in non-cyclical industries are better cash balance candidates.
  • Please provide any additional questions or concerns about the prospective plan sponsor.
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Pinnacle Plan Design is a third-party administrator (TPA) for employer-sponsored qualified retirement plans. We specialize in retirement plan design, administration and actuarial consulting for 401(k)/profit-sharing plans, defined benefit plans, cash balance plans, and 403(b) plans. Pinnacle Plan Design proudly serves businesses nationwide.


A cash balance plan is a type of employer-sponsored defined benefit retirement plan. Unlike traditional defined benefit plans that provide for a certain amount of money at retirement, which can be confusing and hard to grasp, cash balance plans provide the promised benefit in the form of an “account” balance. This makes the benefit much easier to understand and is, thus, more appreciated by employees.

A great benefit of a cash balance plan is that they allow for much higher contributions when compared to 401(k)/profit sharing defined contribution plans. Cash balance plans act as a great tax savings vehicle as higher contributions lead to greater tax savings.

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