November 26, 2018

BOSS Plans – leveraging the benefits of a cash balance plan for small business owners

Cash Balance Plans have been increasing in popularity. In 2016 they made up 37% of all defined benefit plans; that’s a 34% increase from 3% in 2001.* So, why have these plans become so popular? For primarily two reasons:

  1. Large corporate tax deductions that are unattainable with a 401(k) Plan alone
  2. Opportunity for baby boomer-aged key employees to accelerate retirement savings

Small business owners can add to these benefits by layering a Cash Balance Plan on top of their existing 401(k) Profit Sharing Plan, creating a Business Owner’s Special Savings Plan (BOSS Plan).

The BOSS Plan is a tax-qualified retirement plan that utilizes a Cash Balance Plan framework. The owner receives the bulk of his or her annual contributions in the Cash Balance Plan, while eligible employees receive the bulk (or all) of their contributions in a 401(k) Profit Sharing Plan. Then, the employer is able to treat the Cash Balance and Profit Sharing Plans as a single plan for nondiscrimination purposes.

An illustrative example of the BOSS Plan**:

  • Two small business owners (age 55 and 57) with seven staff members
  • The company offers a Safe Harbor (SH) 401(k) with required 3% non-elective contribution and provides 5% of pay in Profit Sharing (PS) Plan (employer contributions).
  • The company opts to layer a Cash Balance Plan on top of the 401(k)/Profit Sharing Plan.
  • Due to the Cash Balance offset, non-targeted employees’ Cash Balance benefits are offset by the SH/PS employer contributions, so they receive no net Cash Balance contributions.


Each owner received $36,500 in employer contributions annually.


Each owner receives $184,000 in employer contributions annually.

  • Staff costs do not change.
  • Even higher deductions are available after liabilities accumulate in the Cash Balance Plan (due to 150% funding allowance).

If you’re a small business owner and want a retirement plan uniquely designed for you, enabling you to contribute far more than you could to a 401(k) Plan, a BOSS Plan may be right for you. Click here for some questions to help determine if this option could be beneficial to you.

In summary, BOSS Plans are popular, efficient and protected. For additional potential benefits and details on the BOSS Plan, check out our first blog here.



* This is the most recent year for which complete IRS Form 5500 data is available.

** The example provided is for illustrative purposes only and does not describe an actual client situation. Results will vary depending upon individual factors.

The Business Owner’s Special Savings Plan (BOSS Plan) is not an IRS designated plan type. CBIZ RPS uses the name, BOSS Plan, to identify the setup of a Cash Balance Plan in combination with a 401(k) Safe Harbor or Profit Sharing Plan.

CBIZ Retirement Plan Services does not provide legal or tax advice.

CBIZ Retirement Plan Services is a trade name under which certain subsidiaries of CBIZ, Inc. (NYSE Listed: CBZ) market investment advisory, investment management, third party administration, actuarial and other retirement plan services. Investments, investment advisory and investment management services offered through CBIZ Financial Solutions, Inc., Member FINRA, SIPC and SEC Registered Investment Adviser, dba CBIZ Retirement Plan Advisory Services.  Investment advisory and investment management services may also be offered through CBIZ Investment Advisory Services, LLC, SEC Registered Investment Adviser. Third party administration, actuarial and other consulting services offered through CBIZ Benefits & Insurance Services, Inc.

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