In fact, while increasingly popular among employers as a defined benefit alternative, they also seem to engender a fair amount of negative response, at least from older workers forced to swap out their traditional pensions. This week, we asked readers what they thought about cash balance plans and, as one might expect, the results were – mixed.
The most popular characterization this week was that cash balance plans were “OK, as long as workers can choose between the old and the new,” cited by nearly 40% . One reader in this category – who had gone through a cash balance conversion at his firm – said, “even though they are allowed the choice, they still complain. They believe the company is trying to pull something over on them. Many people believe that CB plans are inherently evil; in my opinion, not true. But a large difference between them and me is education. People don’t understand their options and believe all the bad press applies to CB plans in general, rather than a few.”
“Devil in the Details”
The need for education was reiterated by a number of respondents. As one reader noted, “the choice of coverage brings with it a whole new set of educational issues. I’ve been in this business since 1978 and I still had a difficult time making the choice when it was presented. I recently sat down with my son-in-law (a Fed-Ex employee) to go over the material he was provided for a plan conversion and was impressed with the personalization, depth of explanation, and choice offered him. But, that got me to thinking, how can a company that isn’t as big as Fed-Ex or doesn’t want to commit the resources be assured that they did their fiduciary duty in educating the participants? As with everything else in this business, the devil is in the details.”
That phrase – “the devil in the details” came up frequently among the nearly 26% that said that the plans were “just another benefit alternative, neither inherently good nor bad.” But even those in this group were not sanguine about the option. As one reader noted, “Cash balance plans have received a great deal of negative publicity, but employees and the general public have to remember that a company doesn’t have to offer ANY retirement plan (especially a defined benefit one), so too much complaining by participants may get them something they didn’t expect.”
Concerns for the future of defined benefit programs bubbled up frequently among respondents. Another reader who saw them as neither good nor bad cautioned, “The problem comes when the government, media, and individuals insist that employees are entitled to traditional defined benefits. Not all companies can or will choose to afford to provide traditional defined benefits indefinitely into the future. It would be a shame to lose this benefit alternative as a result of this entitlement attitude.”
Another who expressed concerns about the current trends noted, “Rather than focusing on being glad that they continue to have a pension benefit that is 100% funded by their employer and represents NO risk on the participant’s part with regard to investment earnings and growth over time, participants whine about how they may be getting a slightly less generous benefit accrual in the later years of their retirement. 411(d)(6) of the code should provide adequate protection against any loss of the value they have accrued as of the benefit conversion, and the participant should be glad that the company hasn’t taken a much more drastic, and perfectly legal, approach to managing costs by terminating the pension plan altogether.”
While another cautioned, ” One thing that we need to keep in mind is that if upon appeal cash balance plans (and pension equity plans) are deemed to be age-discriminatory, this could trigger the demise of the defined benefit system. Terminating DB plans instead of conversions will become the thing to do.”
Nearly 14% said these programs were a bad idea – and several did so at a depth/length not readily reproduced here. Among this group was the reader who noted, “Over the past decade, many employers converted their traditional DB plan to a cash-balance plan for the sole reason that a cash-balance plan represented a reduction in the employer’s annual pension cost and provided “more predictable” future funding (without regard to the impact on their current and future workforce).”
One of the more in-depth responses noted (and this is only an excerpt), “It is only when we are willing to pretend that what we see is not the result of a trap door behind a curtain will we go along with the illusion that cash balance plans do not discriminate and that the accruals are defined benefit accruals. A defined benefit accrual is, and has always been, an annuity at normal retirement age. In a cash balance plan this has required taking hypothetical accounts and running them forward to retirement at “hypothetical” interest rates. Of course, if the rates are really hypothetical, and if the conversion formula for turning the benefit into an annuity is subject to change, then the benefit is not “defined.” Those cash balance plans that put at risk “accrued benefits” (in the traditional sense) are not really defined benefit plans.”
Roughly 10% said that whether the program was good or bad depended on the particular circumstances. One in that category noted, “Personally I try to adopt the attitude that anything I get above zero $ is a gift. I can always find something unfair if I look for it, so just be happy you’re getting something. These complex plans just can’t have answers that satisfy all people. We always work in our plan design and administration to provide for the majority of our population…We always struggle between what we call the winners and losers of our decisions. Everything has compromises and not everyone will be satisfied.”
Only about 7% said the programs were unconditionally a good idea, while about 3% said they weren’t sure, and 1% said they didn’t care.
One reader wisely pointed out, “There really should be two questions: one about cash balance plans and another about cash balance conversions, which could have very different answers.”
But this week’s Editor’s Choice goes to the reader who noted, “As an employee in my forties, a pension plan sounds pretty attractive right now – regardless of how it’s calculated.”
Thanks to everyone who participated in our survey!
Survey Response: "b" - okay, as long as they can choose between old and new.
c. What's the saying pension plans do not kill people, people kill people? Something like that.
Can I pick two answers? If so, I like B and C... I guess I'll go with B if I can only pick one. And although I've read several articles about the IBM ruling, including IBM's own take on it, none of them have been clear. A Washington Post article talks about the hypothetical 35 year old that works 15 years and the hypothetical 50 year old that works 15 years. Both retire at 65, but the 35-year-old - gasp - gets a larger benefit! The article fails to point out that the 35 year old's benefit continued to grow after he left IBM at age 50, which likely accounts for his increased benefit, right? However, there was the odd case of the person who would have gotten more had he retired at 60 rather than working until age 65. Strange things, but I have yet to see one article that covers all of the points effectively.
C--the devil is in the details...
I think cash balance plans are a good idea. American workers have too much retirement money at risk in the market. With cash balance plans, they get a type of retirement plan they can understand and they don't bear the market risk. I frankly think cash balance plans are necessary to save the defined benefit retirement system.
Honestly I find the fervor among most participants around the conversion to cash balance as an illustration of the over inflated sense of entitlement that has become prevalent among the employees of corporate America. Rather than focusing on being glad that they continue to have a pension benefit that is 100% funded by their employer and represents NO risk on the participant's part with regard to investment earnings and growth over time, participants whine about how they may be getting a slightly less generous benefit accrual in the later years of their retirement. 411(d)(6) of the code should provide adequate protection against any loss of the value they have accrued as of the benefit conversion, and the participant should be glad that the company hasn't taken a much more drastic, and perfectly legal, approach to managing costs by terminating the pension plan altogether. So if a cash balance conversion is the best means for the company to stay viable and profitable (insuring their competitive position going forward, and thereby the employment opportunities they have available) while continuing to fully fund a retirement benefit for all eligible employees, then I would have to vote for options "c" and "d" above.
(h) Our forthcoming cash balance plan takes half my pension away which after working 27 years is monstrous. This is the second time a pension plan change has reduced my pension. I went from being ready to retire at my normal retirement age to no time left to catch up. We are being told save more to make up for the loss at the same time we are being told there will be a massive increase in our medical/health payments as our employer will pay less.
I do understand why companies want to stabilize their costs. But they brought those costs down on themselves with past poor decisions. And the people who made those poor decisions are not the ones paying for the consequences. I don't think they should be running a welfare program but I also know they should honor their commitments to employees.
Of course, all of this is moot if I join the growing list of unemployed workers in this country. Then the problem will not be retirement expenses but current daily expenses.
Being an older employee whose DC plan is scheduled to change from traditional pension to cash balance plan when I am age 57, I think the idea stinks. I will have worked for 19 years toward what I thought would be a nice retirement. The company moved the goal line with two minutes left in the fourth quarter.
(b) Personally, I think that as long as an employee may choose, they offer a viable alternative for younger and single older employees. For example, although the benefit is lesser for an older employee under a cash balance plan, the opportunity to port it may outweigh the lesser value. In many traditional pension plans, when a single employee dies, the benefit remains in the pension plan.
As a human resource person, giving employees the choice means double administration.
f) I need to do more research on how they can be used
(e) It really depends on the individual situation
Cash balance plans are a lot cheaper and, therefore, much less generous. However, it's still free money. Lots of free money (traditional pension) is better than a little free money (cash balance) is better than no free money.
(d) - They are the main way that some form of defined benefit pension plan will survive low market returns and the move to full valuation and disclosure. While I can't comment on the legalities of age discrimination, the morality of IBM's approach, with the extreme penalty to long service employees coupled and deceptive communication, is suspect.
Cash balance plans are ok as long as the worker is given the greater of the two benefits.
My answer is c: just another benefit alternative.
I think that most pension systems (DC or DB, including cash balance plans) are inherently "fair." If an employee works his/her entire career under the same system, the pros and cons due to age related difference tend to even out. The problem arises when employers change systems, or employees change employers (even though I would argue that that is their choice) and the employee is forced from one system to another.
We used to have a cash balance plan that had a tiered contribution based on age, so it took away most of the arguments that they "discriminate" against older employees. I'm still confused by that argument though. If employers truly followed the philosophy behind the discrimination laws, age should not be a factor in any employment benefit, including pension contributions. Under that logic, it is the DB plan, and the tiered cash balance plans that discriminate. If two employees work for an employer for 10 years, shouldn't they get the same "pension" benefit, even if one is 40 and the other is 50 when they leave?
I say (c) cash balance plans are neither inherently good nor bad. Offering a new cash balance plan is certainly better than not offering a DB plan at all.
Regarding traditional DB conversions to cash balance plans - plan sponsors are permitted in most cases to terminate or freeze their DB plans which they voluntarily established in the first place, so I don't see what all the hullabaloo is about converting to a cash balance plan that provides a lower future accrual rate than under the previous plan. Sure wear away hurts the mid career employee vs. the traditional DB accrual pattern. However, it is naive to think that employers won't follow their own interests by using their DB plans to attract younger employees (given the coming demographic time bomb of retiring baby boomers and scarce young talent coming on to replace them). Also, wear away can be addressed in plan design by allowing employees to receive the greater of two formulas, or by offering transition credits to older/longer service employees to address the drop in future accruals.
In answer to your question, (b): I think cash-balance plans are okay as along as the individual workers can choose and the plans are not foisted upon them. It is clearly not fair to make near-retirement folks switch to such a plan. Thanks.
Survey response: "A good idea"
(Please allow me to rant a moment....)
We often lose sight ("we" meaning employers; judges and legislators ALWAYS lose sight) that any non-statutory benefit offering is a good idea for employers and employees. These decisions will make those of us analyzing our current retirement plans avoid creative yet equitable plan designs that best meet our individual recruiting/retention needs.
(b) As long as I can choose, I say it's fine. There are certainly some types of workers that would benefit from a cash balance plan structure, but for those who are aiming to spend most if not their entire career in one place, forcing a conversion to a cash balance plan is absolutely detrimental.
Cash Balance plans are benign. The real issue has always been wear-away. Wear-away should be OUTLAWED!!
A person should always be entitled to their previously accrued benefit and to additional accruals in any year in which any type of DB retirement plan is in place.
I vote (c) - neither inherently good nor bad, when evaluating them on their own. The issues, of course, arise with the transition from the existing plan to the new, whether the new be cash balance or just a DC plan replacing a DB plan. Actually, perception-wise, I guess cash balance as a replacement is worse than a DC since it's pretending to be a DB.
The key to understanding the real issue with cash balance plans is to understand that there are public policy reasons for the tax benefits provided to corporations who establish defined benefit (an "accrued" benefit payable at normal retirement) pension plans. Only with these first principles in mind can we intelligently examine the way accrued benefits -- the benefits payable at age 65 -- are redefined in a cash balance plan.
If corporations were to place their arguments in favor of cash balance plans to Congress in support of changes to the Internal Revenue Code the issue would then shift to the merits of the type of thing that a cash balance plan is. Today, the issues are technical; but they go beyond age discrimination issues to the core of what a defined benefit plan is, and has always been.
A cash balance accrual is always lower (in defined benefit terms) based on age. Big problem. So Treasury simply says that because defined benefit cash balance accruals are no longer defined benefit accruals, they can be lower because of age. The magic trick attempted by Treasury in defense of the cash balance plan was pretty slick. It pretended to protect workers and to actually prohibit lower accruals based on age!
The reason age related accruals have been a problem for cash balance plans relates to the fact that older employees have less time to earn interest on their hypothetical defined contribution accounts. Therefore, in a cash balance plan, it would seem that the benefits accrued (in defined benefit terms) for older employees would always be less, simply based on age. So how did Treasury attempt to prohibit age lower accruals based on age?
If the definition of an accrued benefit is magically transformed into defined contribution terms, this defined benefit type of issue is no longer is problem!!! Redefining core cash balance plan accruals so that they are not defined benefit accruals may evade the accrual rules; but the magic trick begs the essential question; viz., is a cash balance type of accrual a defined benefit accrual?
Cash balance supporters cannot have it both ways. They cannot say that defined contribution accruals do not discriminate based on age and then claim that a cash balance plan is a defined benefit plan. It is only when we are willing to pretend that what we see is not the result of a trap door behind a curtain will we go along with the illusion that cash balance plans do not discriminate and that the accruals are defined benefit accruals.
Go back to first principles; go back to the basics. A defined benefit accrual is, and has always been, an annuity at normal retirement age. In a cash balance plan this has required taking hypothetical accounts and running them forward to retirement at "hypothetical" interest rates. Of course, if the rates are really hypothetical, and if the conversion formula for turning the benefit into an annuity is subject to change, then the benefit is not "defined." Those cash balance plans that put at risk "accrued benefits" (in the traditional sense) are not really defined benefit plans. When accrual formulas are not defined, when they are subject to the discretion of an employer, no such plan formula (cash balance or otherwise) can provide defined benefit accruals in the ordinary sense of a defined benefit accrued benefit.
When the plan accrual is just the hypothetical account, the plan is essentially a defined contribution plan! And defined contribution accruals don't discriminate on the basis of age, even when future interest rates change.
So why all this effort to create the illusion that a cash balance plan is a defined benefit plan when what companies really want could be done more simply in a DC plan? Why not just adopt or expand a defined contribution plan, and shut down the old defined benefit plan?
For this we have to again go back to first principles. Look at the tax benefits available to plan sponsors who pretend to preserve the essential nature of defined benefit plans. If they keep alive the illusion of a defined benefit plan they can borrow money (tax deductible) in order to pay for business and operating expenses; but then they can use the improved financial position of the corporation to pay for tax-deductible contributions to their pension plan. Even better than the funding flexibility that only comes with a defined benefit plan, the company can decide to place heavy bets with these contributions on public market equity investments. If the gamble fails, then the company merely pushes off the losses to the public's insurance company, the PBGC. Also, in a conversion, employees are not automatically vested, as they would be in a plan termination. And if the plan had excess assets, no taxes are paid on what really amounts to a taxable switch from a defined benefit to a defined contribution plan.
Bottom line, there is a core cash balance provision that should, under current IRC rules, result in disqualification of any cash balance plan with that provision: A hypothetical interest rate that can be reduced over time, thus reducing accrued retirement benefits. Any time an accrued benefits payable at normal retirement age is not created or created and subject to reduction, that plan is does meet defined benefit qualification rules.
It is a clearly a distortion of the Internal Revenue Code to give a defined contribution type of plan the tax and funding advantages of a defined benefit plan. It would be better for corporations and Congress to be honest, and just allow companies to move money from a defined benefit plan to a defined contribution plan without adverse tax consequences.
The age discrimination, whipsaw and wearaway issues need resolution by an act of Congress that deals specifically with these issues. Beyond that, at this point employers need to be completely open and honest with employees about how cash balance plans work, why they have converted (if that's the case), and how they compare with other alternatives, particularly replaced alternatives. My sense is that most conversions are really intended as money saving projects, yet marketed to employees simply as a "better benefit."
If a company is converting from traditional DB to cash balance, it appears from what I've read that the older employees will walk away with less money. I think that's (a) bad. If a company is starting a new plan from scratch, I'll vote (c) just another alternative plan.
As an employee in my forties a pension plan sounds pretty attractive right now, regardless of how it's calculated.
(c) Just another benefit alternative, neither inherently good nor bad. The problem is that we tend to adopt them as a means of lowering costs for the plan sponsor, yet try to sell them as benefit improvements. What makes employees truly angry is our lying to them. (No, thank goodness, not my employer -- yet)
E It really depends on the situation. The interesting thing I have found lately is more and more companies talking about starting up a DB plan. Cash balance seems to be the latest for old line manufacturing companies that are struggling to make the bottom line.
In response to your survey regarding Cash Balance Plans, they are okay if the worker is given a choice between the old (assuming the old is a DB plan) and the new. However, it doesn't seem that employers are willing to give employees a choice. They are only interested in reducing their pension expense. Since a Cash Balance Plan allows portability of the accrued benefit, it does little to encourage long-term employment.
I think cash balance plans are a bad thing. Just the fact that they are "increasingly popular among employers" gives one pause. As an older employee they make me especially nervous.
I think it depends...our pension offered a traditional benefit and then added cash balance. Employees who were here before the addition will get the greater of the two benefits. Employees who came after will just get the cash balance. This is where it's a good idea because everyone's benefit is at least as good as it was before. The traditional plan isn't frozen, but continues to be calculated as service/salary etc increase. But I've also seen plans where employee's projected benefits do decrease because of the change, and I feel like that's a bad idea, because many employees don't realize the effect of the change.
I've followed the IBM case reasonably closely, and was involved in an early cash balance conversion. I have very little doubt that they clearly have the potential of depriving older workers of benefits, and that employers by and large adopted them to reduce pension expense. I won't say that they are inherently bad, but like most tools they can be used to fix or break things.
Perhaps a better question to ask would be "If your employer converted your traditional final average pay plan to a cash balance plan, how would you feel?"
Don't care. Who has a DB plan anyways? Just another sign of a company on the brink of disaster.
My answer is (e) with a little bit of (a).
Personally I try to adopt the attitude that anything I get above zero $ is a gift. I can always find something unfair if I look for it, so just be happy you're getting something.
These complex plans just can't have answers that satisfy all people. We always work in our plan design and administration to provide for the majority of our population. To provide for "all" is simply too expensive and impracticable to administer, let alone explain so employees understand.
We always struggle between what we call the winners and losers of our decisions. Everything has compromises and not everyone will be satisfied.
I think this will just continue employers to move away from DB plans. They'll simply tell employees, "I give up. No more DB, only DC. You figure out. Its all your responsibility now." After all, employees kind of asked for it. They said I want to job hop so no more 30 year careers at one company, but give me some retirement savings now for the couple years I was here.
My response: B
But may I just add an observation or two...? I work in the Retirement Plan service area of a large financial institution. Our company chose to move to a CB plan that offered employees the right to choose--at the time of distribution--between the former Pension Plan and the new CB. (The company provides a calculation for the CB and a calculation for the old Pension.)
And even though they are allowed the choice, they still complain. They believe the company is trying to pull something over on them. Many people believe that CB plans are inherently evil; in my opinion, not true. But a large difference between them and me is education. People don't understand their options and believe all the bad press applies to CB plans in general, rather than a few.
Sometimes it is unnerving when an employer is really excited about a plan but can't seem to convince the employees that it is a good thing. Sometimes I think employers tend to underestimate their employees and the lengths they will go to research new plans that are "handed" down. It appears that obviously, employers are excited because of the long-term reduced costs associated with cash balance plans.
With the movement of workers from company to company, I feel the same as (B) Ok, as long as workers can choose between the old and new.
Bad Idea. Obviously unfair to older workers. A kind of hybrid based on a workers age and years of service (like 7-10 years on job under 35) should have been used in a phase-in over 15-25 years. This is so older folks would still be covered under old defined benefit. As they retired the new plan would become dominant. There is no way today's hybrid plans as current plan mangers call it can be made fair as that hybrid still short changes folks taking the choice of the "old" pension formula. It didn't have to but the bottom line as always got in the way, especially in today's tough times.
I'd have to go with "c" & "e" for the survey - I think cash balance plans are a valuable option to have when an employer considers a defined benefit plan (and I strongly believe defined benefit pension plans, in general, are an important benefit for employers as well as for society at large). But it all comes down to how a plan's sponsor makes use of it.
I think Cash Balance Plans are a bad idea for many reasons. However, it is better to have an employer provided pension benefit at retirement than not to have one. The way our country is evolving, pension programs will be a thing of the past -- which is too bad as it is a great thing for employees and employers.
In response to your request for feedback on cash-balance plans, I'd like to begin by drawing your attention to the following quote taken from Monday's (8/4/03) WSJ article entitled "Pension Rulings Roil Hundreds of Businesses".
"Employers have always known that cash-balance plans violate age-discrimination rules in pension law, but have been comforted by the fact that the Internal Revenue Service has never issued final regulations on cash-balance plans that decide, one-way or another, whether these plans are exempt from the rules."
In my opinion, employers are more focused on the economic performance of their pension plan rather than the retirement income for employees provided by a tradition DB pension plan. Over the past decade, many employers converted their traditional DB plan to a cash-balance plan for the sole reason that a cash-balance plan represented a reduction in the employer's annual pension cost and provided "more predictable" future funding (without regard to the impact on their current and future workforce).
Regrettably, it now appears many employers looked only at the potential reduction in their labor (pension) costs and failed to properly re-evaluate the original purpose for their traditional DB plan when converting to a cash-balance plan. Fundamentally, the employer (and its Board of Directors) should have asked whether the traditional DB plan was created to reward long tenured employees with income security during retirement or to provide a capital accumulation plan for short term staff (that permits a distribution upon termination of employment)?
Although ERISA protects employees' accrued pension benefits, I personally and professionally believe that an employer who modifies/converts to a cash-balance plan must provide for an equitable accrual of "future" pension benefits to all eligible employees irrespective of the participant's age.
Thank you for this opportunity to share my opinion.
I pick (c). Cash balance plans have received a great deal of negative publicity, but employees and the general public have to remember that a company doesn't have to off ANY retirement plan (especially a defined benefit one), so too much complaining by participants may get them something they didn't expect.
I'm in the B) camp. The plans are a good idea as long as the employee is offered a choice of coverage. However, the choice of coverage brings with it a whole new set of educational issues. I've been in this business since 1978 and I still had a difficult time making the choice when it was presented.
I recently sat down with my son-in-law (a Fed-Ex employee) to go over the material he was provided for a plan conversion and was impressed with the personalization, depth of explanation and choice offered him. But, that got me to thinking how can a company that isn't as big as Fed-Ex or doesn't want to commit the resources be assured that they did their fiduciary duty in educating the participants. As with everything else in this business, the devil is in the details.
would answer b) OK as long as participants are given a choice. When our company converted its defined benefit retirement plan to a cash balance formula three years ago, all employees were given a choice of remaining under the traditional final average pay formula or converting over to the new cash balance formula; longer service employees were given additional "transitional credits" to make their opening cash balance accounts more attractive, while all new hires were covered automatically under the cash balance formula. Our company went out of its way to give employees enough information to make an educated decision.
Cash balance plans are (c) neither inherently good or bad. Depending on individual circumstances, some may prefer pension benefits from a cash balance plan.
The problem comes when the government, media and individuals insist that employees are entitled to traditional defined benefits. Not all companies can or will choose to afford to provide traditional defined benefits indefinitely into the future. It would be a shame to lose this benefit alternative as a result of this entitlement attitude.
I guess (e) "it depends," best fits my perspective. My company recently offered to employees the option of remaining in its traditional plan or switching to a cash balance plan. Due to my age and service, it made sense for me to stick with the traditional plan. For younger employees, especially those who will be changing employers in the future, the cash balance plan may be preferable. For the company, certainly, the cash balance plan with its simpler formula and reduced guarantees/liabilities has major advantages over traditional DB.
(b) OK, as long as workers can choose between the old and the new.
However, I really believe it depends on who's perspective you're taking. Clearly from an employer's perspective, relative to reducing financial liability, they're in favor of a more defined contribution approach vs. the traditional defined benefit pension approach. On the other side of the table you have the employee, who's been counting on that pension for retirement. By having choice, I believe the employer addresses the fairness issue. Although I'm the first to admit that life, and in particular corporate America are not always fair, choice does allow for both sides to
be served. Older employees' can continue to work towards their pension, while others, if they choose, can switch to the cash balance plan. Seeing as many workers today no longer continue to be employed by the same employer their entire career, the cash balance approach may be more appealing. Some form of a sun setting provision could also prove effective as well.
Enough already, I had better get back to work.
c - we looked at this and as with everything there are winners and losers. I think the important thing is to communicate the impact to the individual.
SO LONG AS PEOPLE have a choice.
I think they make the most sense for plans with a lot of turnover. For example, my wife ( a nurse ) now works for a HMO with a 403b but previously worked at two hospitals where she had both DB and 403b coverage. she's rolled the 403bs but is stuck with partial vesting in two DB plans that will each pay something when she is age 65 - if we remember and can find them. She would be much better off long term if she could cash out now and put the money into her IRA or her current 403b as a rollover. This would also simplify things for the hospital as it would be alot fewer people to track.
Reply: a) bad idea --- unless you plan to work only a short time for the employer AND are less than 45 years of age.
I know I'm way too late, but couldn't resist...
There really should be two questions, one about cash balance plans and another about cash balance conversions which could have very different answers. Mine would be:
1) for CB plans, (c) another benefit alternative
2) for conversions, (e) depends on the individual situation.
One thing that we need to keep in mind that if upon appeal cash balance plans (and pension equity plans) are deemed to be age-discriminatory, this could trigger the demise of the defined benefit system. Terminating DB plans instead of conversions will become the thing to do.