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Cash Balance Plans

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part of FuturePlan by Ascensus®

1 Assumes PBGC coverage. Whether a private-sector defined benefit plan is, or is not, covered by PBGC is based on the law (See ERISA Section 4021). In most cases, if such a plan satisfies the section 401(a) tax requirements of the Internal Revenue Code (i.e., if it is a “qualified defined benefit plan”), it is covered by PBGC. However, there are some exceptions that apply, possibly lowering the overall tax deduction.

In the crowded 401(k) marketplace, the Cash Balance Coach® program allows you to bring something unique to your

clients. Join more than 2,000 advisors and plan professionals who have become certified as Cash Balance Consultants

(CBC) through our self-paced online learning program. The program fee of $199 covers a four-part webinar series,

online certification exam, phone/conference call support, free plan designs, co-branding options, and much more.

SAMPLE ILLUSTRATION – 2020

Learn more and get started on your CBC designation today at CashBalanceCoach.com

CASH BALANCE COACH® TRAINING AND CERTIFICATION

FOR PLAN ADVISORS

Name Age Annual Salary 401(k) Profit

Sharing1 Cash Balance Total Contribution

Tax Savings*

Group 1: OwnersOwner 1 60 $285,000 $26,000 $37,500 $0 to $266,847 $330,347 $148,656Owner 2 50 $285,000 $26,000 $37,500 $0 to $162,165 $225,665 $101,549Owner 3 40 $285,000 $19,500 $37,500 $0 to $98,709 $155,709 $70,069Owner 4 35 $285,000 $19,500 $37,500 $0 to $77,064 $134,064 $60,329Subtotals $1,140,000 $91,000 $150,000 $604,785 $845,785 $380,603Group 2: Staff > $130,000 (earned in 2019) 3% of payEmployee 1 45 $168,000 $5,040 $0 $5,040Employee 2 45 $131,000 $3,930 $0 $3,930Group 3: Staff 7.5% of payEmployee 3 65 $80,000 $6,000 $5,524 $11,524

Employee 20 23 $20,000 $1,910 $322 $2,232Subtotals $1,104,000 $0 $70,788 $13,877 $84,665 $38,099Grand Totals $2,244,000 $91,000 $220,788 $618,662 $930,450 $418,703

Percent of Contribution to Owners: 90.9%*Assuming a 45% tax rate; taxes are deferred only.

In the crowded 401(k) marketplace, the Cash Balance Coach® program allows you to bring something unique to your clients. Join more than 2,500 advisors and plan professionals who have become certified as Cash Balance Consultants (CBC), through our self-paced online learning program. The program fee of $199 covers a four-part webinar series, online certification exam, phone/conference call support, free plan designs, co-branding options, and much more.

Accelerate Retirement Savings with a Cash Balance PlanMany business owners and high-income professionals want to increase their pre-tax retirement contributions.

But there are IRS limits of $19,500 in 401(k) plans and $57,000 in Profit Sharing plans. Now you can do much

more to help your high-income clients.

Examples of pre-tax contributions:

• A 45-year-old business owner could contribute $183,000 to his retirement plans.

• A 55-year-old professional could contribute $270,500 to her retirement plans.

• A 62-year-old partner could contribute $357,500 to his retirement plans.

The actual contribution amount is dependent on IRS compliance testing.

What is a Cash Balance plan?A Cash Balance plan is an IRS-qualified (tax-favored) retirement plan that combines the high contribution amounts of a defined benefit plan with the look, feel

and portability of a defined contribution plan.

How does a Cash Balance plan work?In a Cash Balance plan, each participant has an account that grows annually in two ways: with an employer contribution and with an interest credit on previous contributions. Employer contributions are determined by a formula specified in the plan document, and can

be a percentage of pay or a flat dollar amount.

How are Cash Balance plan investments handled?The annual interest crediting rate (ICR) is written into the plan document and is guaranteed. The ICR is often a fixed rate of 4% or tied to a safe-harbor rate like the 30-Year Treasury Rate. Thanks to recent law changes, another option for larger plans is to use the actual rate of return on plan assets. Please refer to our More Options, More Choice, More Freedom brochure that

discusses the Interest Crediting Rate in greater detail.

Can Cash Balance plans be offered in addition to 401(k) Profit Sharing or other plans?Yes, employers can offer a combination of plans. In most cases, a Cash Balance plan is combined with a 401(k) Profit Sharing plan in order to maximize

contribution levels and optimize tax efficiency.

Seven key benefits of Cash Balance plans:

Reducing taxes: Business owners can save

significantly on corporate and personal taxes.

Accelerating retirement savings: Many

owners can double or even triple their pre-tax

retirement savings.

Attracting and retaining top talent: Adding a

Cash Balance plan can make a firm’s retirement

package much more appealing to future partners

and employees.

Flexibility: Not everyone needs to participate

in a Cash Balance plan. Different contribution

amounts can be specified for different

participants or groups.

Easy to understand: Unlike traditionally

complex defined benefit plans, Cash Balance

plans offer clarity with individual participant

accounts and statements.

Portability: Participants can roll over their

Cash Balance accounts into an IRA or another

qualified plan.

Asset protection: Cash Balance plan assets

are protected from creditors in the event of

bankruptcy or lawsuits.

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* Maximum 401(k) with Profi t Sharing amounts may be reduced if compensation is lower than the IRS maximum compensation limit of $285,000 and other deduction limits may apply. Maximum cash balance amounts assume a 3-year average compensation of at least $230,000. Lower 3-year average compensation may reduce the amounts shown.

2020 CONTRIBUTION LIMITS

Available at:

*401(k) $19,500; catch-up $6,500; profi t sharing $37,500 (see below for details)

**Assuming 45% tax, varies by state. Taxes are deferred

“I’ve used Cash Balance plans to help high-income clients significantly improve retirement savings while cutting taxes. That’s a huge advantage to me as an advisor.”

– Sean G. Williams, Financial Advisor

Age 401(k) with Profi t Sharing* Cash Balance Total Tax

Savings**Above 65 $63,500 $277,000+ $340,500+ $153,225

65 $63,500 $277,000 $340,500 $153,22564 $63,500 $283,000 $346,500 $155,92563 $63,500 $289,000 $352,500 $158,62562 $63,500 $294,000 $357,500 $160,87561 $63,500 $280,000 $343,500 $154,57560 $63,500 $266,000 $329,500 $148,27559 $63,500 $253,000 $316,500 $142,42558 $63,500 $241,000 $304,500 $137,02557 $63,500 $229,000 $292,500 $131,62556 $63,500 $218,000 $281,500 $126,67555 $63,500 $207,000 $270,500 $121,72554 $63,500 $197,000 $260,500 $117,22553 $63,500 $188,000 $251,500 $113,17552 $63,500 $179,000 $242,500 $109,12551 $63,500 $170,000 $233,500 $105,07550 $63,500 $162,000 $225,500 $101,47549 $57,000 $154,000 $211,000 $94,95048 $57,000 $146,000 $203,000 $91,35047 $57,000 $139,000 $196,000 $88,20046 $57,000 $132,000 $189,000 $85,05045 $57,000 $126,000 $183,000 $82,35044 $57,000 $120,000 $177,000 $79,65043 $57,000 $114,000 $171,000 $76,95042 $57,000 $108,000 $165,000 $74,25041 $57,000 $103,000 $160,000 $72,00040 $57,000 $98,000 $155,000 $69,75039 $57,000 $93,000 $150,000 $67,50038 $57,000 $89,000 $146,000 $65,70037 $57,000 $85,000 $142,000 $63,90036 $57,000 $80,000 $137,000 $61,65035 $57,000 $77,000 $134,000 $60,300

Under 35 $57,000 Up to $73,000 Up to $130,000 Up to $58,500

How Financial Advisors Can Grow TheirBusinesses with Cash Balance PlansEverything you need to know about the Cash Balance business in one compelling book, written expressly for advisors by the Kravitz Cash Balance Coaches. Packed with useful tips, clear explanations, case studies and checklists, it’s an invaluable tool for anyone seeking success in the retirement plan fi eld.

About Our FirmSince 1977, Kravitz has brought its clients the latest in design, administration, and management of corporate

retirement plans. In 2017, Kravitz became part of FuturePlan by Ascensus, the nation’s largest consulting and

actuarial retirement TPA and the leading provider of Cash Balance plans. Together with the FuturePlan network, we

serve more than 56,000 retirement plan sponsors from 47 locations across the country. For more information, visit

CashBalanceDesign.com and FuturePlan.com.

Why Choose Kravitz and FuturePlan for Cash Balance Plans?Cash Balance plans are sophisticated, complex retirement plans that require specialized actuarial expertise. With signifi cant tax deductions and IRS compliance issues at stake, plan sponsors need an experienced administrator with a record of long-term success.

Focus of expertise. Kravitz is the national practice leader for Cash Balance plans at FuturePlan.

Length of experience. We designed and implemented our fi rst Cash Balance plan in 1989 and have successfully implemented thousands more over the past 30 years.

Breadth of experience. We have Cash Balance clients across all industry sectors, ranging in size from one to over 1,500 plan participants.

Volume of plans. We currently administer 2,000+ Cash Balance plans for clients across the country.

Industry knowledge. Our Cash Balance clients include thousands of law fi rms and medical groups, many with complex partnership structures and those going through mergers and acquisitions.

National thought leadership. We are recognized as the nation’s leader in Cash Balance plan design, off ering the only available certifi cation program, Cash Balance Coach.® We also published a well-received book on the topic and off er frequent webcasts and regulatory updates.

Investment expertise. We understand the balance between plan design and investment dynamics and work with fi nancial advisors to structure the right investment strategy. Both Actual Rate of Return and traditional safe harbor Interest Crediting Rate (ICR) options are available.

For more information about Cash Balance plans, visit CashBalanceDesign.com or call 877 CB-Plans.

Every member of the FuturePlan leadership team brings decades of expertise to serve our clients, backed by the strength of Ascensus and its 40-year record of excellence. FuturePlan is already the leading national provider of defi ned contribution, defi ned benefi t, and Cash Balance plans. Our plan professionals consistently earn top satisfaction rankings for compliance and actuarial services as well as customer service. And that’s just the beginning. Together, we’re helping create a bigger and brighter future for nearly a million Americans.

© 2020 Kravitz, LLC, an Ascensus Company. All rights reserved.

CashBalanceDesign.com FuturePlan.com877 CB-Plans 866-929-2525

Simplifi ed online administration for plan sponsors

24/7 access to Cash Balance plan balances and

account information

Instant electronic distribution of plan notices, forms

and participant communications

Streamlined, simple way for participants to

update personal information, change benefi ciary

designation and other details

Enhanced experience for plan participants:

being able to see their money daily and create

on-demand statements

Three custom-designed portals for the participant,

plan sponsor, and advisor

Online Access to Cash Balance Accounts, 24/7Kravitz clients enjoy the nation’s fi rst ever Cash Balance mobile retirement center, a seamless web-based service

with an optional direct link to 401(k) accounts. This innovative, intuitive portal gives participants, plan sponsors and

advisors instant access to Cash Balance accounts, updated daily. While daily access has been available to 401(k)

plans for many years, the complexity and actuarial requirements of Cash Balance plans were barriers to online

access. Kravitz developed a custom software solution to overcome these limitations.

Simplicity & Clarity: The Kravitz Cash Balance Portal Makes Life Easier

part of FuturePlan by Ascensus®

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