Can employees be excluded from the Cash Balance Plan?

 

Yes. Excluding an employee from the plan can be done in one of three ways.

1. The plan can be written with a provision that enables employees/participants to elect out. However, once an employee/participant has elected out, they cannot elect to enter/reenter the plan.

2. The employee can be written out of the plan under the plan's eligibility provisions. These provisions can be amended or rewritten at a later date allowing the excluded employee into the plan.

3. An employee can be allowed into the plan but be given a relatively small or a zero accrual.