In other words, a money balance plan defines the promised benefit in terms of a stated account steadiness. Increases and decreases within the value of the plan’s investments do not instantly have an effect on the benefit quantities promised to individuals. Thus, the funding dangers and rewards on plan belongings are borne solely by the employer. When a participant becomes entitled to receive benefits under a cash balance plan, the advantages that are acquired are defined when it comes to an account stability. The benefits in most cash stability plans, as in most conventional defined profit plans, are protected, inside certain limitations, by federal insurance supplied via the Pension Benefit Guaranty Corporation .
