You may find these facts interesting, about who is using Cash Balance Plans as part of a retirement plan design strategy (courtesy of John Hancock):
- Companies double contributions to employee retirement savings when adding a Cash Balance Plan: the average employer contribution to staff retirement accounts is 6.9% of pay in companies with both Cash Balance and 401(k) plans, compared with 4.7% of pay in firms with 401(k) alone.
- Medical and dental groups account for 48% of all Cash Balance Plans nationally, and we expect to see steady growth in new plans in sectors such as technology, finance, manufacturing and even retail.
- Small to mid-size businesses continue to drive growth of Cash Balance plans: the highest growth over the past five years has been in companies with fewer than 25 employees. Today, 92% of plans are in place at firms with fewer than 100 employees. Firms with 1 to 9 employees now account for 57% of all Cash Balance Plans.
- California and New York have the highest number of plans, while the fastest growth has been in Georgia and Michigan: California and New York account for 24% of all new Cash Balance Plans nationally, followed closely by Texas, Ohio and Florida. Georgia is a regional powerhouse with close to 29% year-over-year growth in new plans.
Source: 2018 National Cash Balance Report; Kravitz