Archived News Release--Caution: information may be out of date.

U.S. DEPARTMENT OF LABOR

PWBA Press Release: What's a 'Cash Balance Plan'? Labor Department Has Answers [11/30/1999]

For more information call: (202) 693-4650

A number of companies have switched recently from traditional pension plan formulas to something called "cash balance" plans, leaving a lot of workers confused and concerned about what the change will mean for their retirement benefits.

To help sort through the confusion, the U.S. Department of Labor has published information explaining the differences between the cash balance method of determining pension benefits and the more traditional defined benefit plans and 401(k) plans.

"The trend to convert long-standing pension plans to something new has upset workers and we've been hearing from them," Secretary of Labor Alexis M. Herman said. "The first step is to provide enough information so they can understand cash balance plans well enough to ask the hard questions about how the change will affect them."

The publication, "Cash Balance Plans: Questions and Answers," is posted to the department's Web site at www.dol.gov/dol/pwba or may be ordered by calling (800) 998-7542.

"Workers need clear, reliable information," Secretary Herman said. She added that additional questions and comments may be directed via e-mail to cbalance@pwba.dol.gov. Participants will receive online responses to their questions.

Archived News Release--Caution: information may be out of date.