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Article: A cash-balance plan might be the answer for small biz.(small-business owners would like to have a retirement plan )
- Article from:
- Accounting Today
- Article date:
- September 4, 2006
- Author:
CopyrightCOPYRIGHT 2006 SourceMedia, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Many profitable small-business owners would like to have a retirement plan that can provide more than $50,000 of deductible contributions to the owners and other key employees.
A defined-benefit plan is perhaps the only tax-qualified retirement plan that can achieve this. However, in traditional DB plans, the worker benefit costs are too high to make them practical. A cash-balance plan is the solution (see box).
Unlike other defined-benefit plans, a cash-balance plan may be designed to better control the cost of the rank-and-file employee benefits. A cash-balance plan may be designed to either level the owner's contributions, despite wide differences in ...