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How do cash balance plans differ from traditional defined benefit pension plans?
A. Traditional defined benefit plans are required to offer payment of an employee's benefit in the
form of a series of payments for life while cash balance plans are not.
B. Traditional defined benefit plans define an employee's benefit as a series of monthly payments
for life to begin at retirement, but the cash balance plan defines the benefit in terms of a stated
account balance.
C. Pension Plans are available to retirees in a lump sum payment, whereas Cash Balance Plans
are not.
D. In Cash Benefit Plans, these accounts are often referred to as hypothetical accounts because
they do not reflect actual contributions to an account or actual gains and losses allocable to the
account, whereas in a Defined Benefit Pension Plan they do.

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How do cash balance plans differ from traditional defined be.pdf

  • 1. How do cash balance plans differ from traditional defined benefit pension plans? A. Traditional defined benefit plans are required to offer payment of an employee's benefit in the form of a series of payments for life while cash balance plans are not. B. Traditional defined benefit plans define an employee's benefit as a series of monthly payments for life to begin at retirement, but the cash balance plan defines the benefit in terms of a stated account balance. C. Pension Plans are available to retirees in a lump sum payment, whereas Cash Balance Plans are not. D. In Cash Benefit Plans, these accounts are often referred to as hypothetical accounts because they do not reflect actual contributions to an account or actual gains and losses allocable to the account, whereas in a Defined Benefit Pension Plan they do.