National Cash Balance Research Report, 2011

For more information regarding Cash Balance Plans, please contact Kravitz: ( 877 ) CB-Plans www.CashBalanceDesign.com email@kravitzinc.com National Cash BalaNCe Research Report 2011 Design, administration and Management of Retirement Plans Los Angeles • New York • Atlanta • Las Vegas • Salt Lake City • Washington DC • Denver • Ann Arbor • Charleston • Portland • Phoenix Design, administration and Management of Retirement Plans 15760 Ventura Blvd, Suite 910 | Encino, CA 91436-3017 | tel: 818-995-6100 | fax: 818-379-6100 1 Cash Balance Retirement Plans Surpass Growth Rate of 401(k) Plans Average Annual Increase of 20% Since 2001 Kravitz has compiled research on all Cash Balance Plans nationwide as of December 31, 2009, based on the most current IRS Form 5500

filings.* The following statistical highlights, charts and graphs are provided as a reference for retirement plan professionals and others interested in learning more about Cash Balance Plans. Highlights: • Growth rate of Cash Balance Plans significantly outpaces 401(k) plans: In the period 2001–2009, the number of 401(k) plans grew an average of 3% annually, versus 20% average annual growth for Cash Balance Plans. • Rapid growth despite recession: There was an 11% increase in the number of Cash Balance Plans in 2009, and an average annual increase of 20% for the decade. In 2001 there were only 1,337 Cash Balance Plans nationwide, and by 2009 there were 5,840, representing 437% growth. • Rise of Cash Balance Plans coincides with decline of traditional defined benefit plans: In 2001, Cash Balance Plans made up just 2.9% of all defined benefit plans. By 2008 they made up 11% of all defined benefit plans, and we project 15% for 2010. • Small and mid-size businesses drive Cash Balance growth: 82% of Cash Balance Plans are in place at firms with less than 100 employees. • Most Cash Balance Plans are combined with 401(k) Profit Sharing: 89% of Cash Balance Plans are combined with a Profit Sharing or 401(k) plan, and more than half of those plans use New Comparability. • Regional concentration and highest growth: California and New York account for 24% of all Cash Balance Plans. Texas outpaced all other states for new plans, with a 47% increase over two years. *Source: Analysis performed by Kravitz, Inc., using data from IRS Form 5500 filings via the Judy Diamond Associates, Inc. database. The 2009 plan year data is the most current available. Additional data on defined contribution and defined benefit plans comes from Private Pension Plan Bulletin Abstracts by the U.S. Department of Labor Employee Benefits Security Administration (EBSA), 2001–2008 Reports. ©Kravitz, Inc., 2011. The information in this report is general in nature and provided for informational purposes only. © Kravitz, Inc., 2011. The information in this report is general in nature and provided for informational purposes only. 2 Cash Balance Plans: Growth 2001 to 2010 Cash Balance Plans have been steadily increasing in popularity over the past decade, coinciding with the decline of traditional defined benefit plans. Key factors influencing the growth rate of Cash Balance Plans: • As “hybrid” plans, they offer the high contribution limits of a defined benefit plan without...

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