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Reference

Pension glossary

Definitions of the terms that come up most in Cash Balance plan design, valuation, and reporting.

C

Cash Balance PlanA defined benefit plan that expresses each participant's benefit as a hypothetical account balance.

E

Enrolled ActuaryAn actuary licensed by the Joint Board to perform actuarial services for ERISA plans.

F

Funding TargetThe present value of benefits accrued as of the start of the plan year.
Funding ValuationThe annual actuarial calculation of a pension plan's liabilities and required contributions.

I

Interest Crediting RateThe rate used to grow Cash Balance account balances.

M

Minimum Required ContributionThe smallest contribution an employer must make to a defined benefit plan for the year.

P

Pay CreditThe amount added to a Cash Balance participant's hypothetical account each year based on plan formula.

S

T

Target Normal CostThe present value of benefits expected to accrue during the current plan year.

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