Structuring Cash Balance Pension Plans: Maximizing Tax Benefits and Limiting Risks

Designing the Cash Balance Benefit Formula, Managing the Interest Crediting Rate with Plan Investment Returns

Recording of a 90-minute CLE webinar with Q&A

Conducted on Tuesday, March 21, 2017
Recorded event now available

This CLE webinar will provide ERISA counsel and advisors with a thorough and practical guide to structuring hybrid cash balance pension plans and converting current defined benefit plans to cash balance plans. The panel will detail optimal scenarios for establishing a cash balance plan, identify interest rate and other risks in structuring a plan, and discuss critical features to include in any cash balance plan document in light of recent IRS guidance.


For many businesses, particularly closely held firms and professional practices, establishing a new cash balance plan, or converting a traditional defined benefit pension plan to a cash balance pension plan, can provide significant advantages, both in terms of current tax benefits and increased retirement accruals. However, a cash balance plan should be carefully constructed to limit exposure to legal and financial risks while maximizing tax benefits and retirement savings.

A cash balance pension plan is a defined-benefit pension plan under which an employer credits a participant’s account with a defined percentage of the employee’s compensation, or other specified principal amount, plus an interest credit amount. By using a cash balance plan, principals of professional firms and well-established closely held businesses can significantly increase their retirement savings and realize greater current-year tax benefits.

Additionally, plan sponsors may want to consider ways to structure the plan investments so the performance of the trust assets approximates the plan’s specified interest credits. Employee benefits counsel can help ensure that plans are designed and documents are drafted so that the plan and plan sponsor can manage this interest rate risk.

Listen as our experienced panel provides a practical and in-depth guide to structuring cash balance pension plans.


  1. Advantages of cash balance plans
  2. Structure of cash balance plans
  3. Setting principal credits
  4. Setting interest credits
  5. Ideas on plan asset investments
  6. Timing of distributions
  7. Special considerations on cash balance conversions


The panel will review these and other key issues:

  • Funding requirements for cash balance plans
  • Ideal profiles for firms contemplating a cash balance plan
  • Structuring plan investments to avoid a mismatch between the plan’s interest credits and actual trust returns
  • IRS audit targets and areas of concern


Mark L. Lofgren, Principal
Groom Law Group, Washington, D.C.

Mr. Lofgren focuses his practice on employee benefits law, specializing in the design and operational issues for tax-qualified and nonqualified retirement plan arrangements. He manages the legal work for the retirement plans of employers of all sizes, handling major plan redesign projects, IRS rulings, plan compliance reviews, plan correction issues, participant communication materials, and benefit claim analysis. He works extensively with cash balance plan conversions and ongoing issues related to the regulation, operation, and litigation involving cash balance plans. He also handles many plan mergers and other issues related to the retirement plan implications of corporate transactions. Previously, he practiced as a C.P.A. in the area of business and individual taxation.

Andrew Ferguson, FSA, EA
Altman & Cronin Benefit Consultants, San Francisco

Mr. Ferguson is a Fellow of the Society of Actuaries, an Enrolled Actuary, a Fellow of the Conference of Consulting Actuaries, and an ACOPA member. He has extensive expertise in the design, valuation and administration of retirement plans, including a specialty in retirement programs sponsored by law firms and other professional service organizations. He is Past President of the San Francisco chapter of the Western Pension, Treasurer of the Governing Board of Western Pension, and was a member of the Leadership Counsel of ACOPA. He speaks regularly at conferences around the country, and has lectured at Stanford’s School of Law.  


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Customer Reviews

The speakers possessed great technical knowledge and experience.

Ken Watt

Frederic Dorwart, Lawyers

I appreciated the practical solutions to common problems.

Patricia Killian

McCarter & English

Good materials plus well prepared presenters and a good level of detail.

John H. Merkle

Fredrikson & Byron

Great overall summary of ERISA issues.

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Anthony Ostlund Baer & Louwagie

The program covered topics that are of significant concern to many of my clients and I enjoyed the good discussion of the case law supporting the various points made.

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King & Ballow

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Greenberg Traurig

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Greenberg Traurig

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