Cash balance and defined benefit plan valuation support

Four annual limits set the outer edges of a plan design for 2026, all from IRS Notice 2025-67. The annual benefit limit under section 415(b) is $290,000. The compensation limit under 401(a)(17) is $360,000, so pay above that is ignored when benefits are computed. The defined contribution limit under 415(c) is $72,000, which matters when the practice also runs a 401(k) or profit-sharing plan next to the cash balance plan. The elective deferral limit under 402(g) is $24,500.

Source: IRS Notice 2025-67 and the IRS COLA page (reviewed 2026-08-24, opened 2026-10-02). These limits cap the design. They do not tell you what an individual owner can contribute.

A funding valuation discounts benefits using three segment rates built from corporate bond yields, and a mortality table fixed by IRS notice. For valuation dates in 2026 the mortality table comes from Notice 2025-40, which sets the static tables for plans allowed to use them and the unisex table used for lump sums. The segment rates change monthly. The table shows the latest figures from Notice 2026-57, published in September 2026.

Adjusted rates are held within a corridor of 95 to 105 percent of the 25-year averages, and a 25-year average under 5 percent is treated as 5 percent. Source: IRS Notice 2026-57 (rates in percent). Which month's rates a plan uses follows its plan document and the funding rules. Finbryn documents the choice in the workpapers for the plan's enrolled actuary.

A calendar-year plan has seven dates that matter: the January 1 valuation date, three quarterly installments if the plan was underfunded, the fourth installment 15 days after year end, the Form 5500 due date and the final minimum contribution deadline. The diagram shows them in order.

The valuation date is the first day of the plan year, with an exception for plans that had 100 or fewer participants every day of the prior year (26 CFR 1.430(g)-1), which lets such a plan designate any day of the plan year, so January 1 applies only to a plan not using that exception. The installments fall on April 15, July 15 and October 15 of the plan year and January 15 after it; each is 25 percent of the required annual payment. The final minimum contribution is due 8.5 months after year end, which is September 15. Form 5500 is due July 31, and an extension can be requested on Form 5558. Schedule SB is signed by the enrolled actuary before the 5500 is filed, so Finbryn aims to hand over the review file well ahead of that signature.

Illustrative, made-up numbers: in this three-person practice the pay credits add up to $96,250 a year, which is neither the employer's contribution nor a maximum. The owner earns $500,000, but only $360,000 counts under the 401(a)(17) limit. The plan design gives the owner a 25 percent pay credit and each of two staff members 5 percent.

Those are credits to hypothetical accounts, not the employer's contribution. The contribution has to fund those credits, interest credits and any gap between plan assets and the funding target. The valuation then produces two bounds: a minimum required contribution and a maximum deductible contribution, both computed from the segment rates, mortality table, plan assets and census. The employer chooses an amount between them. This example does not compute those bounds, because they cannot be found from these inputs, and it has not been tested for nondiscrimination.

A cash balance plan lets an owner deduct far more than a 401(k) allows, but the business must fund promised pay credits every year, including weak years. For 2026 a defined benefit plan can fund an annual benefit of up to $290,000, while a defined contribution plan caps annual additions at $72,000 (IRS Notice 2025-67, checked 2026-10-16).

It suits steady, high-profit businesses with few employees. Before adopting, ask the plan's enrolled actuary to model a bad-market year and to give the expected annual actuarial, investment and administration fees as one total. Asset-based fees on top of actuarial fees are the warning sign.

Cost follows the plan, and Finbryn quotes in writing after reviewing a sample of the data. The quote names who signs. The main drivers are the number of participants, whether the work is a design study, a first-year valuation or a recurring annual valuation, how many plans sit side by side (a cash balance plan next to a 401(k) needs combined limit work), data quality, the number of scenarios the owner wants in the design study and the date the Form 5500 is due.

We did not find a public fee schedule for private-practice cash balance plans, so this page publishes no price range. Our guide to what a pension actuary costs collects the dated public evidence that does exist: three providers' published small-plan prices and 2024 Form 5500 actuarial fees by plan size. When you compare quotes, ask whether the figure covers the design study, the annual valuation, Schedule SB, nondiscrimination testing and PBGC premium support separately, and who bills for each. Plan costs that are not provider fees, such as PBGC premiums for covered plans, are set by the PBGC and are explained on the plan termination page. See pricing.

The plan's enrolled actuary signs Schedule SB, and the engagement letter confirms who that is. 20 CFR 901.2 says ERISA actuarial services provided through an entity may be provided on its behalf only by an enrolled actuary who is an employee, partner or consultant, and the Form 5500 instructions require Schedule SB to be prepared and signed by the plan's enrolled actuary. Finbryn prepares the data checks, model runs, contribution tables and support schedules. It does not choose the assumptions or certify the adjusted funding target attainment percentage. An enrolled actuary signs that certification, and the engagement letter confirms who.

If the combined plan limit under section 404(a)(7) applies, the same actuary reviews that test. The IRS notes that when employer contributions to a defined contribution plan with overlapping coverage, other than elective deferrals, stay at or under 6 percent of those participants' pay, the combined limit does not apply, and only the excess over 6 percent counts when it is exceeded.