New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

What is a Cash Balance Plan and How Does it Work for Harsco Employees?

Healthcare Provider Update: Healthcare Provider for Harsco Harsco Corporation, a global supplier of industrial services and engineered products, typically partners with prominent healthcare providers for employee health plans. Among the notable providers, Aetna often serves as a primary healthcare partner, offering comprehensive health insurance solutions, including medical, dental, and wellness programs tailored to the needs of Harsco employees. Potential Healthcare Cost Increases in 2026 As we look to 2026, healthcare costs are anticipated to surge significantly, driven by a confluence of factors. With many states facing imposed premium hikes of over 60%, particularly for Affordable Care Act (ACA) marketplace plans, employees of Harsco may experience drastic changes in their out-of-pocket healthcare expenses. The potential expiration of enhanced federal premium subsidies will amplify these increases, with more than 22 million enrollees projected to see monthly costs rise by an average of 75%. Coupled with escalating medical costs and aggressive rate adjustments from top insurers, navigating the healthcare landscape will require strategic planning to mitigate financial impacts. Click here to learn more

'Cash balance plans can provide Harsco employees with a unique opportunity to grow their retirement savings through tax-deferred contributions and higher contribution limits, offering an important strategy for those looking to enhance their financial future.' – Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.

'Cash balance plans can offer Harsco employees a powerful tool to build substantial retirement savings with the added benefit of employer-managed investments, promoting a more secure financial future for high-income workers.' – Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

What a cash balance plan is and how it works.
The key benefits and limitations of cash balance plans.
How these plans compare to traditional retirement vehicles like 401ks.

Among the various retirement plan options available today, cash balance plans are becoming better known as a useful instrument for high earners, particularly those employed by large corporations like Harsco. These plans offer significant advantages to those who want to save more than standard retirement vehicles like 401ks or individual retirement accounts (IRAs) allow because they combine features of defined-benefit and defined-contribution plans.

A Cash Balance Plan: What Is It?

A cash balance plan is a type of defined-benefit pension plan in which benefits are represented as an account balance. The primary distinction between it and a defined-contribution plan, such as a 401k, is how the account is funded and maintained, even though it functions similarly. Employer contributions to each participant's account are made annually under a cash balance plan, which offers two different kinds of credits: interest credits and pay credits. Over time, these contributions build up, providing the worker with a predetermined account amount when they retire.

For example, an employee may decide to convert a $500,000 cash balance account into an annuity upon retirement, which would provide a consistent income stream for the duration of their retirement. To continue tax-deferred growth, they can also take a lump sum payment and roll it over into an IRA or another employer-sponsored retirement plan.

Cash balance plans are subject to annual inflation-adjusted contribution restrictions set by the Internal Revenue Service (IRS). A participant who is 62 years of age or older may accumulate up to $3.6 million in their cash balance plan by 2025. This makes it a desirable choice for individuals looking to signficantly grow their retirement savings due to its high cap.

In this article, we will discuss:

What a cash balance plan is and how it works.
The key benefits and limitations of cash balance plans.
How these plans compare to traditional retirement vehicles like 401ks.

A Cash Balance Plan: What Is It?

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Limits on Contributions and Comparison to Conventional Plans

Contribution caps offered by cash balance plans in 2025 are significantly higher than those of 401k plans. While 401ks will require a catch-up contribution of $11,250 for employees aged 60 to 63, cash balance plans offer more flexibility in terms of contribution limitations, especially for high-income earners. These caps often surpass the contribution limits of conventional retirement plans by many times, but they can change depending on variables like age, income, and work history.

Principal Benefits of Cash Balance Plans

1. Tax-deferred growth: Cash balance plan contributions are tax-deferred, which reduces taxable income and provides immediate tax benefits. Participants can build money for retirement and save more on taxes as a result.
2. High contribution limits: Cash balance plans, which are especially advantageous for high-income individuals or those wishing to increase their retirement savings later in their careers, allow contributions far greater than the 401k plan limits.
3. Rollover flexibility: Participants can transfer their cash balance funds into an IRA or another retirement plan when they retire, giving them greater control over how they manage their retirement assets and allowing for ongoing tax-deferred growth.
4. Employer-managed investments: Cash balance programs shift the investment risk to the employer, as opposed to 401k plans, where the employee bears this responsibility. Employees at Harsco, who might not have the time or background to handle their own retirement plans, can feel more at ease knowing the employer manages this process.
5. Federal protection: The Pension Benefit Guaranty Corporation (PBGC) provides federal protection for benefits under cash balance plans, offering an additional layer of assurance.

Possible Drawbacks to Cash Balance Plans

1. Restricted availability: Compared to other retirement plan options, cash balance plans are less accessible. These plans are typically offered by large companies, like Harsco, and may not be available at smaller firms or those without similar pension offerings.
2. Taxation on distributions: Employees will pay taxes on distributions even though contributions are tax-deferred. If the account has grown substantially, this could result in a larger tax obligation upon retirement.
3. Best for high-income workers: Cash balance plans are especially beneficial for high-income workers due to their large contribution limits. The advantages of these plans may not be as noticeable for individuals with lower incomes.
4. Complexity: People who are unfamiliar with pension plan arrangements may find it challenging to understand cash balance plans. It is often recommended to consult a financial advisor to navigate the intricacies and confirm the plan aligns with long-term retirement goals.

In Conclusion

Cash balance plans offer a unique and effective means for Harsco employees to build up sizable retirement funds. These plans combine elements of defined-benefit and defined-contribution plans, offering significant tax-deferred contributions, excellent federal protection, and a high degree of investment management assurance.

Although typically available at larger companies like Harsco, cash balance plans are particularly suitable for high-income earners who are looking to enhance their retirement funds. Despite their complexity, for those who qualify, these plans present an attractive option due to their potential for significant retirement accumulation. They can serve as an effective tool for securing a comfortable retirement, whether used alone or in conjunction with other retirement vehicles.

Before determining whether a cash balance plan is the best option for your financial future, it is essential to comprehend the precise terms, conditions, and tax ramifications, just like with any other retirement plan. You may confirm that your retirement plan aligns with your long-term goals and objectives by speaking with a financial advisor.

Cash balance plans may provide Harsco employees with a dependable source of retirement income, especially for those nearing retirement. These plans allow participants to begin collecting benefits as early as age 55, compared to other retirement savings options that require waiting until age 59½ to access funds without penalties. This flexibility, combined with the plan’s high contribution limits and tax benefits, makes cash balance plans a desirable choice for employees looking to improve their retirement strategy.

By combining features of both defined-benefit and defined-contribution plans, a cash balance plan is an effective retirement savings tool. With its larger contribution limits, government guarantees, and tax-deferred growth, it offers a dependable means for employees at Harsco to build significant retirement savings. Explore the advantages and challenges of this growing retirement plan today and consider how it can boost your long-term financial wellbeing.

Sources:

1. Tergesen, Anne. 'The Retirement-Savings Weapon Doctors and Lawyers Use to Build Wealth.' Wall Street Journal , 14 Mar. 2025, www.wsj.com/personal-finance/retirement/cash-balance-plans-retirement-high-earners-71bfed2e?utm_source=chatgpt.com .

2. Chubb, Chad. 'Cash Balance Plan Explained: Maximize Tax Savings and Build Wealth.' WealthKeel , 10 Apr. 2025, www.wealthkeel.com/blog/cash-balance-plan-retirement/?utm_source=chatgpt.com .

3. 'Cash Balance Pension Plans: A Complete Guide.' October Three , 10 months ago, www.octoberthree.com/articles/cash-balance-pension-plans-a-complete-guide/?utm_source=chatgpt.com .

4. 'Cash Balance Plan vs. 401(k): A Simple Comparison.' Emparion , 7 months ago, www.emparion.com/cash-balance-plan-vs-401k/?utm_source=chatgpt.com .

5. 'Cash Balance Pension Plans: A Complete Guide.' October Three , 10 months ago, www.octoberthree.com/articles/cash-balance-pension-plans-a-complete-guide/?utm_source=chatgpt.com .

How does the Harsco Pension Scheme ensure that investment strategies align with the financial goals of its members, and what measures are in place to assess the adequacy of these strategies over time? Given the complexities involved in managing a pension scheme, understanding the decision-making processes and the criteria for evaluating fund performance is crucial for members to make informed retirement choices.

Investment Strategy Alignment: The Harsco Pension Scheme ensures that its investment strategies align with members' financial goals by regularly reviewing its Statement of Investment Principles (SIP) and adjusting strategies based on quarterly performance monitoring. The Trustees use tools such as LCP Visualise to track investment returns and funding levels, ensuring the Scheme is on track for full funding by 2025. This review process helps guarantee that the investment strategies are adequately meeting long-term goals and adapting to market conditions(Harsco Pension Scheme_3…).

In what ways does the Harsco Pension Scheme engage with its investment managers to ensure transparency and stewardship in voting on significant shareholder resolutions? Exploring how Harsco collaborates with these managers can shed light on the efficacy of decision-making and the importance of governance in the scheme's investment practices.

Engagement with Investment Managers: The Harsco Pension Scheme engages closely with its investment managers, delegating stewardship activities like voting on shareholder resolutions. These managers, such as BlackRock, follow rigorous voting and engagement policies, which are reviewed regularly. The Trustees ensure transparency by monitoring managers’ ESG integration and voting behaviors and by addressing significant issues, such as modern slavery or climate risks(Harsco Pension Scheme_3…).

What are the specific retirement benefits available to employees under the Harsco Pension Scheme, and how can members customize their retirement strategies to fit their individual needs? This question addresses the diversity of retirement options and the potential for tailoring plans to meet unique financial situations.

Retirement Benefits Customization: The Harsco Pension Scheme offers a range of retirement options, including default and self-select investment options that reflect member demographics and retirement preferences. Members can customize their retirement strategies through diversified funds, ensuring their investments are aligned with individual needs. The default strategy has been reviewed to ensure appropriateness for the majority, with options for drawdown, lump-sum withdrawals, or annuity purchases(Harsco Pension Scheme_3…).

How does the Harsco Pension Scheme handle the changing demographics of its membership, especially in terms of investment risk and available retirement options? Understanding how the scheme adapts to demographic trends can help employees anticipate changes that may affect their retirement savings and strategies.

Adapting to Demographic Changes: The Trustees monitor demographic trends and adapt the Scheme’s investment strategies accordingly. For example, as the Scheme matures, the investment allocation moves towards lower-risk assets to reflect the changing membership profile. Regular reviews ensure the Scheme adapts to the evolving needs of its members, helping to reduce risk while maintaining adequate returns(Harsco Pension Scheme_3…).

What is the process for Harsco employees to access their pension statements, and how frequently are these updates provided to ensure that members stay informed about their retirement savings progress? Regular communication about contributions and growth can significantly impact an employee's comfort level when planning for retirement.

Pension Statement Access: Harsco employees can access their pension statements through regular updates provided by the Trustees, typically on a quarterly basis. These statements, including detailed reports of contributions, investment growth, and progress toward retirement goals, help members stay informed and make adjustments as necessary(Harsco Pension Scheme_3…).

How does Harsco incorporate Environmental, Social, and Governance (ESG) considerations into its investment philosophy, and what impact do these principles have on the pension schemeâ€™s performance? A deeper examination into these aspects may enhance employee understanding of socially responsible investing trends within their pension fund.

ESG Considerations: The Harsco Pension Scheme integrates Environmental, Social, and Governance (ESG) principles into its investment strategy, regularly assessing its managers’ ESG practices. These assessments include human rights, climate change, and CEO pay ratios, ensuring that investments are socially responsible and aligned with long-term sustainability goals(Harsco Pension Scheme_3…).

What are the implications of the current IRS limits on contributions to retirement plans for employees participating in the Harsco Pension Scheme in 2024? Recognizing how these financial regulations impact personal contributions and matching funds can empower employees to maximize their retirement funding strategies.

IRS Limits Impact: The current IRS limits on contributions to retirement plans, such as those applicable in 2024, directly impact Harsco employees by capping how much they can contribute tax-free. Understanding these limits helps employees plan their contributions to maximize employer matching and ensure they take full advantage of their retirement benefits(Harsco Pension Scheme_3…).

With regards to the ongoing performance evaluations, what benchmarks does the Harsco Pension Scheme utilize to measure the success of its investments, and how are these benchmarks selected? This insight can help employees understand the performance metrics that drive the long-term viability of their pension scheme.

Benchmarking Investments: The Harsco Pension Scheme uses various benchmarks to assess the performance of its investments. These benchmarks are selected based on expected risk and return profiles and are reviewed quarterly. Monitoring against these benchmarks ensures that the Scheme’s strategies remain aligned with long-term funding goals and adapt to changing market conditions(Harsco Pension Scheme_3…).

How can Harsco employees obtain more information on the specific investment options available within the pension scheme, including the associated risks and potential returns? Access to comprehensive investment literature is essential for employees to make well-informed decisions regarding their pension scheme participation.

Investment Options and Information: Harsco employees can obtain detailed information about their pension’s investment options, including the associated risks and potential returns, through regular reports from the Trustees and investment consultants. This transparency allows employees to make informed decisions about their pension participation(Harsco Pension Scheme_3…).

What is the preferred method for employees to contact Harsco to gain further clarification on their questions about the pension scheme, and what resources are available for them during the retirement process? Clear communication channels and support mechanisms are vital as employees navigate their retirement preparations. These questions are designed to provoke thought and discussion around the operations, benefits, and governance of the Harsco Pension Scheme while providing employees with a foundation for understanding their retirement options.

Communication Channels: Employees can contact the Trustees of the Harsco Pension Scheme for clarification on pension-related questions through established communication channels. Resources, including personalized financial advice and regular meetings with investment managers, are available to assist employees during the retirement planning process(Harsco Pension Scheme_3…).

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Name of Pension Plan: Identify the name of the pension plan. Years of Service and Age Qualification: Determine the requirements for employees to qualify for the pension plan. Pension Formula: Understand how the pension is calculated. Company 401(k) Plan: Name of 401(k) Plan: Identify the name of the 401(k) plan. Qualification for 401(k) Plan: Determine who qualifies for participation in the 401(k) plan.

Harsco announced a significant restructuring plan in early 2023 aimed at streamlining its operations and reducing costs. This included a series of layoffs across various divisions. The company projected that these measures would improve operational efficiency and align with its strategic goals.

Harsco offers stock options and RSUs to its employees as part of its compensation package. The company's stock options are designated as SOs, while RSUs are referred to as RSUs. For the years 2022, 2023, and 2024, Harsco has made stock options and RSUs available to key employees, including executives and high-performance staff.

Harsco’s official website, the benefits section details various health benefits, including medical, dental, and vision coverage. They offer a range of plans including PPO and HDHP (High Deductible Health Plans) with HSA (Health Savings Accounts) options. They also provide wellness programs, mental health resources, and employee assistance programs. Company Reviews and Job Boards: Sites like Glassdoor and Indeed reveal employee reviews about Harsco’s health benefits. Many reviews mention the company’s competitive benefits package, including health insurance, dental, and vision plans. However, some employees noted that the benefits could be improved, particularly in terms of coverage and cost. Industry Reports: Industry reports and compensation studies indicate that Harsco’s health benefits are generally in line with industry standards. The company provides a range of healthcare options with a focus on comprehensive coverage and preventive care.