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. Pinnacle is proud to offer retirement plan administration services in Boise, ID (Idaho), as well as nationally.
Cash Balance Plans
Many owners desire larger tax deductions and accelerated retirement savings. Implementing a cash balance plan may be the best solution for such owners. Recent legislation encourages more and more professionals and successful business owners to adopt this type of plan.
In a cash balance plan, a “theoretical” account balance (or “TAB”) is maintained on behalf of each participant. Thus, each participant in the cash balance plan has a TAB that resembles those in a 401(k) or profit sharing plan (defined contribution “DC” plans).
On an annual basis the TAB is credited with a “compensation credit” and an “interest credit”. The compensation credit can be a flat dollar amount or a percentage of pay and can vary by employee. The interest credit is determined by the plan document, and will typically be a fixed 5% rate or, alternatively, could be based on a conservative index, such as the rate on 30‐year U.S. Treasury Securities.
Because the cash balance plan is communicated in terms of an “account balance”, the benefits provided are more easily understood, and appreciated by employees. Cash balance plans take the mystery out of the employee benefit plan.
Finally, cash balance plans are more predictable than traditional defined benefit plans; a participant’s account balance can be projected based on plan provisions to a future date with relative ease, no more special calculations or vague explanations.
Contact: Third Party Administrator Boise
Pinnacle Plan Design is proud to offer retirement plan administration services in Boise, ID (Idaho), and surrounding areas including Garden City, Meridian, Eagle, Kuna, Nampa, Emmett, Caldwell, Mountain Home, Ontario, Payette, Weiser, Hailey, Jerome, Baker City, and Twin Falls.