BANKING AFFAIRS

Detailed explanation-1: -Cash balance pension plans are defined benefit pension plans in which each participant has a hypothetical account that is credited with a dollar amount. The account earns interest based on an employer contribution usually calculated as a percentage of pay.

Detailed explanation-2: -Investment Risks-The investments of cash balance plans are managed by the employer or an investment manager appointed by the employer. The employer bears the risks of the investments. Increases and decreases in the value of the plan’s investments do not directly affect the benefit amounts promised to participants.

Detailed explanation-3: -A Cash Balance plan is a defined benefit plan that specifies both the contribution to be credited to each participant and the investment earnings to be credited based on those contributions. Each participant has an account that resembles those in a 401(k) or profit sharing plan.

Detailed explanation-4: -The Employees’ Provident Fund (EPF) is a retirement benefit as per the EPFO Act 1995, wherein, the member invests part of his salary every month and the employer makes an equal pension contribution in PF towards his/her EPS pension account.