How is the contribution divided up among the participants (Does everyone receive the same amount of money)?

One of the exciting things about adding a Cash Balance Plan to a Profit Sharing/401(k) Plan is that not only are much higher deduction levels available but the owner can also achieve a much bigger percent of the overall contribution. We sometimes call this getting “a bigger piece of a bigger pie.” This is due to the arbitrage involved in the different interest rate used in testing the combination plans for non-discrimination versus the interest rate used to convert a Cash Balance credit to an equivalent annuity. At the same time it is possible to not just favor the owner but also some key and/or long service employees. There are various rules to make sure participants get certain minimum amounts. In some cases it is possible to exclude some employees who would otherwise be eligible.