Cash Balance Design

Design Your Own Cash Balance Plan with MGKS

At MGKS we offer highly flexible and well thought out cash balance plan design and administration services. Cash balance plans are considered hybrid plans as they take the good qualities from both defined benefit plans and 401(k) plans, then meld them together into a vehicle that is both easier to understand, and one that offers a high level of funding. Our actuaries and pension administrators are highly skilled and well versed in the theory behind actuarial mathematics as well as the legal guidelines that must be followed to keep these plans in compliance.

In some cases, these plans can generate required minimum contributions which must be paid each year to avoid penalties. Working with an experienced consultant or actuary to design these plans couldn’t be more important as we do our best to protect you from unwanted required funding while intentionally targeting your desired level of funding each year. We work directly with you, your financial advisor, and tax/legal professionals to develop these programs. Please schedule a consultation today to discuss your options.

Company Benefits

(Plan Sponsor)

Cash Balance plans are most popular for businesses with high profits and stable income. When a plan sponsor needs a larger contribution than can be achieved in a 401(k) plan, they often turn to cash balance plans for the solution.  The commitment to fund and saves hundreds of thousands of dollars per year for retirement can be daunting and having an experienced team in place to support your plan is one of the most important decisions you can make.  Below is a summary of some of the benefits these plans can provide to your company.

Predictable Costs:

Benefit accruals are based upon a stated formula and driven by your desire to fund. Once these accruals are locked in you should expect this level of accrual each year if salaries remain stable. Market performance can increase or decrease your available funding each year, but we have ways to minimize the impact of a fluctuating market.


Opposite of traditional defined benefit plans that apply complex actuarial mathematics to determine the present value of a future stream of annuity payments, cash balance plans are very transparent and easy to understand. Participant balance will grow at a stated level of accrual and a stated interest crediting rate each year. When a participant wants to know how much they have accumulated in these plans, they can simply look at their hypothetical account balance which can also be used for lump sum distribution payouts.


  • Flexible Benefit Accruals
  • Potential to fund over $290,000 per year (reduced for ages <62)
  • Transparent employee benefits
  • Plan Design Education
  • Fast accumulation of wealth
  • Large tax deductions


Cash balance plans are great retirement plan designs for successful businesses with steady revenue. They are intended to help business owners increase their retirement savings while enjoying significant tax deductions annually. Cash balance plans are great retirement designs that will increase rates of retirement savings. Considering cash balance plans are “hybrid plans”, they will perform well by incorporating elements of both defined benefit & contribution plans. Cash balance plans guarantee specific benefits to employees at retirement making them predictable and cost effective.