Freezing Your Cash Balance Plan – How Does It Work?

In order to freeze your cash balance plan there are three things to take into consideration. The first is that participants will not earn benefits in 2020 if they freeze their cash balance plan. Next, the freeze reduces the participants required contributions for 2020, and lastly the freeze must take place before participants would earn their 2020 benefits.

What Steps Do I Need to Take?

If participants want to freeze their cash balance plans they must (1) contact their Third Party Administrator (TPA)/Actuary to let them know. (2) Have the TPA/Actuary prepare a freeze amendment & employee notice, and (3) the participant must sign the amendment and notify employees of the freeze. Check out this video to learn more:

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Jeremy D. Palm, QPA, QKA

Director, Specialty Tax Services

Jeremy specializes in the administration and design of Defined Benefit Plans, both traditional and cash balance. Understanding the various moving pieces with retirement plans, Jeremy thrives on technical conversations with clients. He is interested in getting to know his clients and their businesses, develops rapport quickly, and focuses on building positive relationships. Jeremy is also a part of Lurie’s Law Firm Go-To-Market team that delivers industry-focused tax, accounting and consulting solutions.

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