PLANSPONSOR - April/May 2021 - 29

savings and attract top talent are key
factors, " the report says.
Those who need to catch up are often
professionals who were paying off student
loan debt, says Kravitz. " The design allows
them to squeeze 20 years-worth of savings
into 10 years. "
During the pandemic, some cash
balance sponsors froze plan accruals, or,
as Kravitz says, " put their plans on pause. "
Many have since unfrozen their plan as
their firm's economics have improved,
while others are waiting to make sure any
recovery they see is long-lasting.
The adoption of new plans stalled
during the year-plus of COVID-19, Kravitz
says. " It's difficult to assess exactly why.
I'm not sure it was all due to the pandemic. I
think COVID did cause some firms financial
harm, so they didn't adopt a plan, but
I also think it had something to do with
the SECURE [Setting Every Community
Up for Retirement Enhancement] Act
provision that extended the time allowed
for employers to adopt [and fund] a cash
balance plan. "
Previously, employers starting a cash
balance plan had to fully fund it the year
before it became operative. " This caused
great concern because employers didn't
know how their businesses would fare in
the following year, " Syed Nishat, a partner
at Wall Street Alliance Group, in New York
City, previously told PLANSPONSOR. With
the Coronavirus Aid, Relief and Economic
Security (CARES) Act, " Employers can
decide to adopt a cash balance plan, and
fund it by their tax filing deadline, " Nishat
says. " This is better, because they know
their business' budget for the current year. "
Corporate tax increases seem likely,
based on President Joe Biden's stated
plans, and " when taxes increase, we see a
huge interest in cash balance plans, " says
Kravitz. " Owners' and professional service
firms' motivation for having a plan isn't
just to save for retirement but also to reduce
their tax liability. "
Over the past decade,
the
PLANSPONSOR Defined Benefit (DB)
Administration Survey has watched cash
balance plans grow from 16% to 21% of the
DB plans serviced by a collection of leading
plan administrators. Meanwhile, the
number of traditional DB plans serviced
by the same providers has hovered around
9,000 plans. The mix of those plans,
however, has shifted notably. As of yearend
2020, active/open DB plans accounted
for just 42% of DB plans tracked by the
survey, down from 63% in 2010, while the
number of frozen plans more than doubled
to 43% of DB plans.
Still, there is nearly as much work to
do when a DB plan is closed or frozen as
when it is active, and ignoring the plan
could come at great cost. A frozen DB plan
still has a fixed set of promises based on
when individuals will leave the company
PLANSPONSOR.COM April - May 2021 29

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PLANSPONSOR - April/May 2021

Table of Contents for the Digital Edition of PLANSPONSOR - April/May 2021

Ready Solution?
Tiptop Health Savings Accounts
2021 Defined Benefit Administration Survey: Shedding Light on DB Plans
How TRO Might Benefit Plans
By Popular Demand
What's the ROI?
PLANSPONSOR - April/May 2021 - Cover1
PLANSPONSOR - April/May 2021 - Cover2
PLANSPONSOR - April/May 2021 - 1
PLANSPONSOR - April/May 2021 - 2
PLANSPONSOR - April/May 2021 - 3
PLANSPONSOR - April/May 2021 - 4
PLANSPONSOR - April/May 2021 - 5
PLANSPONSOR - April/May 2021 - 6
PLANSPONSOR - April/May 2021 - 7
PLANSPONSOR - April/May 2021 - 8
PLANSPONSOR - April/May 2021 - 9
PLANSPONSOR - April/May 2021 - 10
PLANSPONSOR - April/May 2021 - 11
PLANSPONSOR - April/May 2021 - 12
PLANSPONSOR - April/May 2021 - 13
PLANSPONSOR - April/May 2021 - 14
PLANSPONSOR - April/May 2021 - 15
PLANSPONSOR - April/May 2021 - Ready Solution?
PLANSPONSOR - April/May 2021 - 17
PLANSPONSOR - April/May 2021 - 18
PLANSPONSOR - April/May 2021 - 19
PLANSPONSOR - April/May 2021 - 20
PLANSPONSOR - April/May 2021 - 21
PLANSPONSOR - April/May 2021 - Tiptop Health Savings Accounts
PLANSPONSOR - April/May 2021 - 23
PLANSPONSOR - April/May 2021 - 24
PLANSPONSOR - April/May 2021 - 25
PLANSPONSOR - April/May 2021 - 26
PLANSPONSOR - April/May 2021 - 27
PLANSPONSOR - April/May 2021 - 2021 Defined Benefit Administration Survey: Shedding Light on DB Plans
PLANSPONSOR - April/May 2021 - 29
PLANSPONSOR - April/May 2021 - 30
PLANSPONSOR - April/May 2021 - 31
PLANSPONSOR - April/May 2021 - How TRO Might Benefit Plans
PLANSPONSOR - April/May 2021 - 33
PLANSPONSOR - April/May 2021 - By Popular Demand
PLANSPONSOR - April/May 2021 - 35
PLANSPONSOR - April/May 2021 - What's the ROI?
PLANSPONSOR - April/May 2021 - 37
PLANSPONSOR - April/May 2021 - 38
PLANSPONSOR - April/May 2021 - 39
PLANSPONSOR - April/May 2021 - 40
PLANSPONSOR - April/May 2021 - Cover3
PLANSPONSOR - April/May 2021 - Cover4
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