Tag Archives: cash balance formula

Formula updates and new options improve retirement benefits

One defined benefit (DB) plan sponsor decided to change how the plan calculated participant benefits from a final average pay formula to a cash balance formula. The change produced two groups of employees with significantly different levels of retirement benefits. Milliman was able to help the sponsor improve the amount of benefits provided to employees as well as give them the ability to receive income in retirement on a flexible basis for employees individual needs. Milliman actuary Vicki Mazzie provides some perspective in this article.