Who is responsible for the plan's investments?

Unlike Profit Sharing Plans, which are usually participant-directed, but can be trustee- directed, Defined Benefit Plans - including Cash Balance Plans - are trustee-directed. If you as the owner are also the trustee, then you are directing the investments. Please note:

a. Participants are credited with an interest rate specified in the plan document (such as 30 year treasury rates or a flat rate such as 5%).

b. Since the non-owner participants are usually getting a small percent of the contribution credits (usually under 20%) there is no need to match up the investments with the interest credits. Some of the criteria or considerations involved with the investment strategy are the proximity of the owner's benefit to the maximum allowed by law as well as coordination with the owner’s other investments including their business, home, IRAs, personal savings, etc.