Employees do not have control of their own accounts in a Cash Balance plan, but they can possibly influence how much is contributed each year. Contributions to a Cash Balance plan should not be adjusted more than once every few years, but they can be adjusted.

In small partnerships without many, or any, employees, there is likely to be more flexibility, or willingness for the owners of the business to jump through the hoops required to have the plan re-worked. Such changes could require a new plan document.

In small partnerships the owners can use these to defer income on their own compensation, but technically these plans only take employer contributions. The employer bears all investment risk on the pooled assets.

Hypothetically this can also mean that they can use gains over their guarantees to infuse more money into the operations and capital projects of the business, but in most cases they will play it safe and keep a substantial reserve on hand since they cannot avoid making contributions in years where the investment performance of the assets in the pension fund goes down.

Employers must make a contribution each year based on the employee’s salary as well as an interest-crediting contribution, and these contributions are credited to the “hypothetical” account for each employee, which really just means an accounting line-item is updated, but the assets remained pooled together.

What Happens If I Withdraw Money From My Cash-Balance Plan Before I Retire?
How Do I Allocate my Assets in Retirement?