Cash Balance Plans Offer Lump Sums

The announcement earlier this year by IBM rocked the planned benefits world when Big Blue changed their benefits fom a pension plan to a cash-balance plan.

Employees working at IBM shouldn't feel they are alone. In fact, more than 325 companies with names like AT&T and Xerox, also have converted to cash-balance plans.

Most everyone understands that the traditional pension plan thrives through employee and employer donations for the long-term. Cash-balance plans, on the other hand, offers savings to employees for each year they work, allowing them to take the money in a lump sum when they leave.

Employees who work for a company for a long period of time benefit more from the pension plan. However, with the workforce now employed with more companies throughout their lives, the pension plan is not likely to save them very much money. Conversely, in a cash-balance plan, employees make no contributions, but can take a lump-sum payment and roll it over into their own IRA.

You may like these other stories...

The US Securities and Exchange Commission (SEC) has chosen a former partner and vice chairman with Deloitte LLP as its new chief accountant.James Schnurr, who specialized in financial and SEC reporting for public companies...
Boehner, Camp profit from corporate bid to avoid US taxesRichard Rubin of Bloomberg reported on Tuesday that House Speaker John Boehner (R-OH) and House Ways and Means Committee Chairman Dave Camp (R-MI) profited from a...
Summer is a time for kicking back and playing a few round of golf with friends, for example. But if you're on the green, you'd better be careful: The SEC may be looking over your shoulder.In July, the SEC announced...

Already a member? log in here.

Upcoming CPE Webinars

Aug 28
Excel spreadsheets are often akin to the American Wild West, where users can input anything they want into any worksheet cell. Excel's Data Validation feature allows you to restrict user inputs to selected choices, but there are many nuances to the feature that often trip users up.
Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.
Sep 26
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.