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Case Study: How a Cash Balance Plan Minimized Taxes and Maximized Retirement Savings for a Small Business


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Case Study: How a Cash Balance Plan Minimized Taxes and Maximized Retirement Savings for a Small Business

A successful independent, family-owned, upscale jewelry business has been in operation for nearly 50 years. The company is a C corporation, co-owned by a husband and wife who are on W-2 salary, as are five additional employees. The business had an existing safe harbor 401(k) plan that provided a contribution of 3% of pay to its employees; the plan was administered by a bundled retirement plan provider.

The owners are in their early 60s with plans to retire within the next three to five years. They came to Intac FuturePlan in December 2021 for help in boosting their retirement savings more quickly and reducing their tax liability.


With retirement on the horizon, the owners needed to save more aggressively for retirement. They were also facing a very large tax bill that year. They had significant income they wanted to defer but the existing plan design did not accommodate their needs.

Because their plan was with a bundled 401(k) provider, they lacked access to a) more innovative options and b) pension consultants to work closely and proactively with them. They needed more personal service and a more customized solution to meet their goals. The former plan administrator never discussed updated options available to solve their challenges.


Using a combination tested design, our actuaries added a cash balance plan (a sophisticated defined benefit plan) to their existing 401(k) plan. The prior plan administrator had no awareness of this untapped opportunity for the client to minimize taxes and maximize retirement savings.


  • The addition of a cash balance plan provided the business owners with more than 90% of the total contribution of over $500k.  
  • The business owner saved over $200k in taxes while making a significant contribution to their own retirement savings and provided an extra benefit to staff, helping to retain employees.
  • Employees (whose employer contribution had previously been at the minimum 3%) received another 7% of pay contribution into their accounts, helping them to save more money, more quickly.
  • Additionally, the employer mitigated some of the corporation’s bonus requirements by deferring bonuses into the plan. This put even more money in employees’ accounts.

 Intac FuturePlan offers small businesses personal guidance and support, with plan monitoring, report filing, and customized plan designThis ensures our clients’ needs are well served and their business and savings goals are met. Contact us for a review of your existing qualified retirement plan or to set up a new plan for business owners and employees.