DRESHER, PA — FuturePlan by Ascensus has released its 13th annual Cash Balance Outlook and Trends Report, showing explosive growth in cash balance retirement plans over the past two decades. Once a niche product, these plans have now surpassed $1 trillion in assets and account for more than half of all defined benefit plans in the United States.
The report highlights a more than 1,025 percent increase in cash balance plans since 2003, growing nearly eight times faster than 401(k) plans. The trend reflects a growing preference among small business owners and retirement professionals for tax-efficient strategies that allow for accelerated retirement savings.
“Surpassing the trillion-dollar mark and now representing over half of all defined benefit plans, cash balance plans have proven to be a powerful, tax-efficient solution for accelerating retirement savings,” said Dan Kravitz, national practice leader for cash balance plans at FuturePlan.
Key findings from the 2025 report include:
- Dominance in Defined Benefit Market: Over 55 percent of defined benefit plans now use the cash balance structure.
- Small Business Adoption: Firms with nine or fewer employees make up more than 56 percent of all plans, underscoring their importance for small employers seeking to compete for talent.
- Sector Leadership: Medical specialty groups, particularly radiologists and anesthesiologists, are the top adopters, representing more than 35 percent of cash balance plans.
- Regional Concentration: California and New York lead adoption, accounting for nearly 30 percent of plans, followed closely by Florida and Texas.
Cash balance plans combine features of defined benefit and defined contribution programs, offering participants the promise of a lifetime annuity while allowing employers to credit accounts with a set percentage of pay plus interest. This hybrid model gives business owners flexibility to make large tax-deferred contributions while providing employees with predictable retirement benefits.
FuturePlan, which has specialized in cash balance plan design and administration for more than 35 years, drew its findings from multiple sources, including its own book of business, IRS Form 5500 filings, BrightScope data, and U.S. Department of Labor statistics.
The report emphasizes that cash balance plans are no longer a niche tool but a mainstream option shaping retirement strategy across industries, particularly among small businesses looking for ways to bolster savings in a competitive labor market.
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