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Account-based benefit presentation, so owners and employees can see a balance instead of only a formula.
Cash Balance Plans
A retirement account experience, built on a stronger foundation.
Cash Balance Plans are a type of Defined Benefit Plan with an account-based presentation. That can make the strategy easier to visualize while preserving the potential for substantial, tax-advantaged retirement contributions.
For owners who like to see the numbers clearly
A plan is only useful if it fits your real life.
We start with the business you have—not a generic profile. Then we help you see the trade-offs in plain language, with the right professional partners involved at the right time.
Important distinction: Sterling Pension Group is a retirement plan consulting and third-party administration firm. We are not actuaries. When an independent Enrolled Actuary’s formal certification or valuation is required, we coordinate that work with the appropriate professional.
What makes it different
A Cash Balance Plan expresses the benefit as a hypothetical account balance that grows through pay credits and an interest crediting rate. The assets are generally pooled, but each participant’s benefit is tracked through the plan’s records.
The hypothetical account is a record, not a brokerage account with your name on a separate fund. The interest credit is a plan promise. Investing the trust as if it were a personal account can fight that promise. The traditional formula, which states a retirement annuity instead of an account, is the sibling design on defined benefit plans.
What the numbers can look like
Contribution levels depend on the plan’s design, participant census, compensation, age, and funding target. The right answer is specific to your facts—not a generic illustration—and Sterling helps you understand those variables before you commit.
Anything on this site that looks like “an owner age 55 can put in $X” is an illustration, not a limit and not a quote. The IRS does not publish a cash balance deposit cap. It publishes a defined-benefit dollar limit, $290,000 of annual benefit in 2026, and a defined-contribution annual-additions limit of $72,000. How those ceilings interact is on the limits page and in the illustrations note. The calculator is a conversation starter, not a valuation.
A practical fit for owner-led businesses
Cash Balance Plans can be especially compelling for profitable companies with one or a few owners, steady income, and a desire to move more money into a tax-deferred retirement structure. Professional firms, medical practices, and consultants use them because partners of different ages should not be forced into identical deposits.
They are often paired with a 401(k) profit-sharing plan. That combination is its own page: 401(k) and cash balance. A self-employed owner whose SEP has run out of room should start at self-employed cash balance.
What to evaluate
The opportunity is personal to your numbers.
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Potential for higher contributions than a 401(k) alone, after the actuary has the census and the pay definition.
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Can complement an existing retirement plan. Do not adopt a second plan and hope last year’s test still applies.
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A clearer year-to-year view of contributions and benefits, provided the census is refreshed. See staff cost before you assume an owner-only sketch survives the employees.
The deposit is a funding promise
A cash balance plan is not a SEP with a larger logo. Minimum funding generally falls due 8½ months after the plan year ends. Missing it can mean an excise tax. The deduction often follows the tax-return date, including extensions, which is a different clock. Both are on the deadline calendar. If a year turns soft, the conversation is an amendment or a freeze, not a silent skip. That is after the plan exists.
Who signs what
Sterling prepares the administration and coordinates the independent Enrolled Actuary. We do not certify the valuation and we do not sign Schedule SB. Your CPA takes the deduction. The recordkeeper or trustee holds the assets. Mixing those fees into one “the plan costs 1 percent” story is how owners overpay. The split is on fees.
Ready to explore the fit?
Let’s put your business in context.
Bring the census and the current 401(k) or SEP. We will not turn a phone call into a certified contribution.