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 Portland, OR (Oregon), as well as nationally.

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Topic: Understanding the Funding Range in Cash Balance Plans

A cash balance plan is an excellent retirement vehicle for owners, partners and highly compensated employees to receive significant retirement contributions above and beyond a traditional 401(k) and profit sharing plan.  With input from the client and their advisors, an actuary determines the interest crediting rate as well as unique cash balance pay credits for each employee.  The pay credit is calculated using factors such as eligible compensation, age and employee status.  The sum of each participant’s interest credits and compensation credits makes up their Theoretical Account Balance.

Contributions are calculated after the end of a plan year and the plan sponsor receives a report detailing the amount of money to be credited to each eligible employee.  This report often includes three funding options.  Why are there three funding options and which one should be used?  Let’s review these options and analyze situations where each should be utilized.

Typically, the following three funding values are provided to cash balance clients:

1. Minimum Required Contribution (MRC)
2. Amount to “fully fund”
3. Maximum Deductible Contribution

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Contact: Third Party Administrator Portland

Pinnacle Plan Design is proud to offer retirement plan administration services in Portland, OR (Oregon), and surrounding areas including Milwaukie, Cedar Hills, Cedar Mill, Beaverton, Lake Oswego, Oak Grove, Tigard, Vancouver, Aloha, Minnehaha, Tualatin, Gladstone, West Linn, Fairview, and Oregon City.