Saturday, October 5, 2013

Cash Balance Design

Cash Balance Design2012 National Cash BalaNCe Research Report www.CashBalaNCeDesigN.Com | ( 877 ) CB-PlaNs RETIREMENT PLANS THAT SAVE TODAY AND BUILD TOMORROW 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 © Kravitz, Inc., 2012. The information in this report is general in nature and provided for informational purposes only. 1 Cash Balance Retirement Plans Double Projected Growth Rate 21% increase in new plans, 18% increase in assets Kravitz annually compiles research on all Cash Balance Plans based on the most current IRS Form 5500 filings.* The statistical highlights, charts and graphs in this report are

provided as a reference for retirement plan professionals and others interested in learning more about Cash Balance Plans. Highlights: • Growth in Cash Balance Plans dramatically exceeds expectations: the number of Cash Balance retirement plans grew 21% between 2009 and 2010, almost double the previous year’s growth rate of 11%. The number of 401(k) plans shrank slightly in the same period, down 1%. • Stalled economy no deterrent to adoption of new plans: despite the slow recovery and economic uncertainty, adoption of Cash Balance Plans continued to grow dramatically. Between 2008 and 2010, there was a 38% increase in new plans. • Cash Balance Plans continue to significantly outpace the growth of 401(k) plans: in the period 2001-2010, the number of 401(k) plans grew less than 3% annually, versus 20% average annual growth for Cash Balance Plans. In 2001, there were only 1,337 Cash Balance Plans nationwide, and by 2010 there were 7,064, representing 810% growth in a little under a decade. • Companies more than double contributions to employee retirement savings when adding a Cash Balance Plan: the average employer contribution to staff retirement accounts is 6% of pay in companies with both Cash Balance and 401(k) plans, compared with 2.3% of pay in firms with 401(k) alone. • Small and mid-size businesses drive Cash Balance growth: 84% of Cash Balance Plans are in place at firms with less than 100 employees. • Cash Balance Plans now make up almost 20% of all defined benefit plans: in 2001, Cash Balance Plans made up just 2.9% of all defined benefit plans; in 2010, the number was 16%, expected to reach 20% when 2011 data becomes available. • California and New York have the most plans, while the fastest growth is in Florida, Texas and Michigan: California and New York account for 23% of all Cash Balance Plans nationally, but the fastest-growing regions for new plans are Florida, Texas and Michigan. * Source: Analysis performed by Kravitz, Inc., using data from IRS Form 5500 filings via the Judy Diamond Associates, Inc. database. The 2010 plan year data is the most current complete data set 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). © Kravitz, Inc., 2012. The information in this report is general in nature and provided for informational purposes only....

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