| Yes, an employer can offer a combination of qualified retirement plans in order to produce a larger contribution amount. Just as a Profit Sharing feature can be added to a 401(k) plan, an employer can add a Cash Balance plan as well. In fact, a 401(k) plan in combination with a Cash Balance plan can be the ideal plan-design for many companies and partnerships.
How do design and administrative costs compare with those for 401(k) Profit Sharing plans?
It is more expensive to set-up and administer a Cash Balance plan than a 401(k) Profit Sharing plan because the plan's funding must be certified by an actuary each year. However, the tax benefits of the Cash Balance plan will often significantly exceed the additional cost. Expenses will vary by size of plan and annual testing requirements.
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