what is a cash balance plan
A cash balance plan is a defined benefit retirement plan that maintains hypothetical individual employee accounts like a defined contribution plan.n addition, the cash balance plan would provide an interest credit of say 6% of the prior yearâs balance in each workerâs âhypothetical accountâ so that the current yearâs balance would be the sum of the prior yearâs balance and the current yearâs pay credit and an interest credit on prior yearâs balance.