In this brief interview from the 401(k) Summit in Las Vegas, John Sullivan of 401(k) Specialist speaks with Steve Sansone, National Sales Consultant at Kravitz, about the growing relevance of cash balance plans (CBP) in the retirement landscape.
Sansone explains that CBP are gaining traction because they solve two key problems for high-income earners:
- High taxes – these plans offer significant tax deferral benefits.
- Retirement preparedness – they allow individuals to accelerate retirement savings beyond the limits of traditional 401(k) plans.
Although CPB have been around since 1985, their adoption was previously stunted due to regulatory uncertainty. This changed with the Pension Protection Act of 2006 and the 2014 tax reform, which clarified rules and spurred growth.
Despite their benefits, many CPAs and financial advisors still lack familiarity with these plans. Sansone notes that Kravitz has been actively educating professionals across the country to bridge this knowledge gap. The focus of advisors on 401(k)-related fiduciary issues has diverted attention from exploring cash balance plans.
Sansone emphasizes that CBP are now the fastest-growing retirement plan design in the U.S., calling them “too big to ignore” for anyone working in the retirement planning space.
READ MORE –
Why Cash Balance Plans are Sophisticated, Effective and Incredibly Frustrating
Why Cash Balance Plans Make Sense for 401k Participants (and Advisors)