Cash balance plans have shown strong growth in recent years, according to a recent report—to the tune of 221% in the last 10 years.
Geographically, cash balance plans are roughly equally distributed. October Three says that the South, Northeast, Midwest and West each account for approximately 25% of all such plans.
However, distribution is not so even by other measures, says October Three. For instance, based on data from Forms 5500 available as of September 2021, the number of cash balance plans has grown by the following measures in these sectors during the period 2014-2019:
- Educational Services: 100%
- Real Estate Rental and Leasing: 126%
- Construction: 165%
Smaller employers are much more likely to have a cash balance plan, says the report.
| Plan Size | Number of Cash Balance Plans | Increase in the Last 10 Years | Plans Created Between 2014 and 2019 | % of all Defined Benefit Plans |
| Less than 100 participants | 9,342 | 336% | 17,692 | 54 |
| More than 100 participants | 1,267 | 9.4% | 455 | 21 |
But larger cash balance plans have more participants and assets.
| Plan Size | Plan Assets | Number of Participants |
| Less than 100 participants | $13.5 billion | 164,693 |
| More than 100 participants | $1.0473 trillion | 10,368,826 |
In another sign of health, says October Three, a strong majority of cash balance plans in 2014 and in 2019 were active and not frozen—to a far greater extent than DB plans.
| Plan Type | Active vs. Frozen, 2014 | Active vs. Frozen, 2019 | Change, 2014-2019 |
| Cash Balance, Less than 100 Participants | 91% | 89% | - 2 percentage points |
| DB Plans, Less than 100 participants | 64% | 65% | +1 percentage point |
| Cash Balance, More than 100 Participants | 61% | 58% | - 3 percentage points |
| DB Plans, More than 100 participants | 41% | 38% | - 3 percentage points |
The report is available here (Note: requires registration).
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