A cash balance plan is generally used by businesses with multiple owners who have stable surplus income and are interested in larger tax deductions and accelerated retirement savings. A cash balance plan is a type of a defined benefit plan that resembles a 401(k) plan; however, it allows contributions that typically far exceed the limits of a 401(k) profit-sharing plan. Unlike a traditional defined benefit plan, which promises a monthly payment in retirement, a cash balance plan provides a participant with a hypothetical account balance. This balance increases annually from two sources: employer contribution and guaranteed investment earnings linked contributions. Upon retirement or plan termination, the assets may be rolled over into an IRA account where they will continue to grow tax deferred. Cash balance design supports the establishment of multiple participant groups, which allows owners with divergent savings objectives to meet their individual goals.