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A cash balance plan is a defined benefit retirement plan that maintains hypothetical individual employee accounts like a defined contribution plan.The hypothetical nature of the individual accounts was crucial in the early adoption of such plans because it enabled conversion of traditional plans without declaring a plan termination.
The cash balance plan typically offers a lump sum at and often before normal retirement age. However, as is the case with all defined benefit plans, a cash balance plan must also provide the option of receiving the benefit as a life annuity. The amount of the annuity benefit must be definitely determinable as per IRS regulation 1.412-1.
"A cash balance plan is a defined benefit plan that defines the benefit in terms that are more characteristic of a defined contribution plan. In other words, a cash balance plan defines the promised benefit in terms of a stated account balance."
The particular plan IBM launched, however, is known as a cash balance plan, which is a bit different than a classic DB plan. With a cash balance plan, employees do not have individual accounts ...
401(k) plans are a vital tool for workers to save for their retirement. But they've also received a lot of criticism from financial-protection advocates, who argue that 401(k)s haven't delivered ...
COB – Close of Business. COC – Cost of Credit [2] or Cost of Capital [3] COD – Cost of Debt [4] or Cash on Delivery. COE – Center of Excellence or Cost of Equity [5] COGS – Cost of Goods Sold. Corp. – Corporation. COO – Chief Operating Officer. CPA – Certified Public Accountant. CPI – Consumer Price Index.
A balance transfer is a transaction that moves existing debt from one credit card to another card. If you transfer the balance from a card with a higher APR to a card with a lower rate, or even an ...
Cash balance plans, for example, provide a guaranteed benefit like a defined benefit plan, but the benefit is expressed as an account balance, like a defined contribution plan. Pension equity plans are a type of cash balance plan that credits employee accounts with a percentage of their pay each year, similar to a defined contribution plan.