Report Says Small Businesses Fueling Cash Balance Boom

A cash balance plan consultant says that cash balance programs are the fastest growing sector of the retirement plan market.

The 2011 National Cash Balance Research Report, released by Kravitz, notes a 20% average annual increase in new cash balance plans since 2001, compared with the 3% average annual growth rate in 401(k) plans.

According to the report, there were 5,840 Cash Balance Plans active in 2009 (the most recent year for which IRS reporting data is available), up from 1,337 in 2001, and there are now 10.5 million participants in cash balance plans, with $606 billion in total assets.

“Cash balance plans are increasingly popular with business owners seeking tax savings, retirement security and a buffer against market fluctuations,” said Dan Kravitz, President of Kravitz, in the announcement. “The new IRS regulations released in October 2010 added clarity and flexibility for plan sponsors, so we expect to see even more growth in 2011.”

Other highlights from the 2011 National Cash Balance Research Report include:

  • Small and mid-size businesses continue to drive cash balance plan growth: 82% of Cash Balance Plans are in place at firms with fewer than 100 employees.
  • In 2009, there was an 11% increase in new cash balance plans, while Kravitz says the overall retirement plan market remained stagnant.

Kravitz notes that the highest rate of cash balance plan growth was in Texas and Illinois.  According to the report, there was a 47% increase in those programs in the Lone Star State and a 27% bump in the Land of Lincoln between 2007 and 2009, though California and New York account for 24% of all cash balance plans.

A free PDF download of the 2011 Cash Balance Research Report is available at Additional information is available at