Cash Balance Pension Plan Flashcards
1
Q
what type of vesting is required in a cash balance pension plan?
A
3-year cliff (graded is not allowed)
2
Q
what 2 credits make up contributions in a cash balance pension plan?
A
In a typical cash balance plan, a participant’s account is credited each year with a “pay credit” (such as 5 percent of compensation from his or her employer) and an “interest credit” (either a fixed rate or a variable rate that is linked to an index such as the one-year treasury bill rate).