This course covers the types, characteristics, advantages, and disadvantages of defined benefit pension plans and cash balance pension available to U.S. businesses. Included in this course are explanations of the pension funding and deduction rules, pension benefit formula rules, and actuary’s responsibility for the ongoing operation of this type of plan.

6–1 Describe the basic characteristics of a defined benefit plan.
6–2 Describe the basic characteristics of a cash balance pension plan.
6–3 Describe differences between defined benefit and defined contribution plans in regard to funding and deductibility of employer contributions.
6–4 Describe the different formulas used in determining retirement benefits.
6–5 Describe the actuarial assumptions and basic methods used in funding a defined benefit plan.
6–6 Analyze a situation to identify advantages and disadvantages of a defined benefit plan.

Author: Michael B. Cates, MS, CFP®

Michael B. Cates, MS CFP® joined the College in 1986, and is the professor for the Income Tax Planning course of the CFP Certification Professional Education Program.  He received his CFP® certification in 1995, and completed the College's Master of Science degree program in 1997.  Mike is also the lead professor for the introductory Income Tax Planning cours ein the College's master's program.  In addition to his responsiblities at the College, Mike also maintains a tax planning and preparation firm in Aurora, Colorado. 

You can reach Mike at

Complexity Level: Intermediate