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Subject:  Re: Cash Balance Pension Date:  8/20/1999  2:58 PM
Author:  TMFPixy Number:  13299 of 104445

Ken asks:

<<My wife's employer converted their defined benefit pension to a "Cash Balance" plan earlier this year. Though we'd like to think we know a thing or two about investing and retirement planning, etc..., we're really baffled as to the in'-and-out's of this new type of pension plan. She now gets a quarterly statement from her employer that shows, in big bold print (of course), a dollar amount that I guess is the "cash balance". What does this "cash balance" really represent?

What happens if she were to leave that employer (not through a retirement, though)? Does she get that dollar amount in a lump sum - almost like a 401k rollover?>>

That number reprsents her vested interest in the retirement plan as of the statement date. If she leaves, that's what would be available to her at retirement. Whether she can roll it to an IRA on termination prior to reaching the plan's retirement age depends on the plan. Most would allow her to do so, but not all do. That's a question she should ask of her HR/Benefits folks.

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