QUESTION: How do I setup a cash balance plan with the following provisions?

Participation:	1 year of service from date of hire , adjusted to 1st of month coincident with or following
Service for accruals:	In completed months, starting at date of hire
Age:	In completed months
Interest:	5% per annum - credited monthly
Company Contributions:	Participant
	Age + Service	Percent of Pay
	20	4.0%
	30	4.5%
	40	5.0%
	50	5.5%
	60	6.0%
	70	6.5%
	80	7.0%
	90	7.5%
	100	8.0%

ANSWER: The basic steps to setting up a cash balance plan are:

1. Set up a Service Definition (and a Service Definition Set to reference it) that will be used to determine the service portion of the age plus service requirements.
2. Set up a Salary Definition (and a Salary Definition Set to reference it) for the benefit accruals ("accrual basis") of the cash balance plan. 
3. Create an accrual definition type of Benefit Formula component with a cash balance accrual format, and include it in the Plan Definition.

The detailed steps are:

1. Set up, and reference in a Service Definition Set, a Service Definition that will be used to determine the service portion of the age plus service requirements.
• Name, for example: Service for Cash Balance
• Calculate service based on: Elapsed time.
• Service rounding rule: select, or create new, a Service Rounding library entry that rounds to nearest months:
• Name: Completed Months
• Check "Round amount to" and select "Month (1/12th)"
• Direction: Nearest
• Measurement period: month
• Event Definition: <none>
• Elapsed time parameters:
• Calculation method (the default):  Date subtraction:  years + months/12 + days/365.25
• Start date field: date of hire
• Service eligibility (e.g., 21 and 1) parameters:
• Check "Service starts on or after this Eligibility Definition"
• Select, or create new, an Eligibility Definition library entry for 1 year of service:
• Name, for example: Date of participation
• Conditions: Age: leave blank
• Conditions: Service: 1
• Using service from: This Service Definition
• Service earned at eligibility: Grant service retroactively
• Use defaults for the remainder of the Service Definition and Save as New.
• Make a new Service Definition Set (Name: Service for Cash Balance), using the new Service Definition 


2. Set up, and reference in a Salary Definition Set, a Salary Definition for the benefit accruals ("accrual basis") of the cash balance. 
• Name, for example: Monthly Salary
• Reference a Salary History library entry with the appropriate database field
• Measurement period (used to group and count salary periods): month
• Use defaults for the remainder of the Salary Definition and Save as New.
• Make a new Salary Definition Set (Name: Monthly Salary) using the new Salary Definition.


3. Create an accrual definition type of Benefit Formula Component with a cash balance accrual format, and include it in the Plan Definition.
• Name, for example: CashBalance
• Component type: Accrual definition
• Accrual Format: Cash balance [sum of (basis x rates) with interest]
• Under the Basis formula topic, reference an operator that returns the Monthly Salary calculated in step 2 above.   If this salary was defined as the <Base Salary Set> Definition in the Census Specifications, then the #Salary operator can be used. Otherwise, reference a custom operator (which can be created by clicking the  button) defined as follows:
• Name, for example: #sal_cb
• Type: Salary
• Under the Salaries & Limits parameters "Included Salary Definition Sets", select Monthly Salary with a Multiplier of 1.
• Use defaults for the remainder of the Custom Operator
• The Accrual Basis Expression is just the operator defined in step d above: #sal_cb
• Accrual Rates:
• Reference the Service Definition Set created in Step 1 above: Service for Cash Balance
• Rate type:
  • select Varies by
  • select points (age+service)

  From	Up to	Rate
  0	30	0.040
  30	40	0.045
  40	50	0.050
  50	60	0.055
  60	70	0.060
  70	80	0.065
  80	90	0.070
  90	100	0.075
  100	-	0.080

  
  
• Use defaults for the remainder of the accrual rates.  Specifically, the "Apply annualized rate to career average/cash balance basis formula" box should be checked.
• Accrued Benefit & Rounding:  select Expected value (or reference a Database field if you have an empirical balance that you want to start with).
• Interest Crediting parameters:
• Structure:
• Annualized Plan Year Crediting rate: Constant: 0.05
• Crediting Frequency: Monthly
• For Crediting periods less than one year, adjust crediting rate: geometrically.
• Use defaults for the remainder of Interest Crediting.
• Finally, in the Plan Definition, include a Benefit Definition that uses this cash balance component (CashBalance) in the benefit formula.  After you have run a calculation, the Detailed Results of CashBalance, in the Benefit Formula Components section, will show all of the relevant dates with age, service, salary, accruals, interest and balances of the calculation.