Practice Finances Freezing Pension (Cash Balance) Accruals to Enhance Financial Flexibility As the COVID-19 pandemic continues to create economic turmoil across all industries, it’s important for struggling businesses to seek effective solutions to free up available funds. For larger medical practices who sponsor cash balance plans, freezing plans could be an effective solution to free up a significant amount of capital during the COVID-19 crisis. Most cash balance pension plans provide that benefits are “earned” once employees complete 1,000 hours during the year. For full-time employees, 1,000 hours is usually reached in June. At least 15 days prior to this date, the plan may be “frozen” by providing a notice to plan participants and amending the plan to curtail benefits. Once amended, this will stop plan benefits from increasing, thereby eliminating the “normal cost,” which is typically the largest component of a plan’s required contribution. During this turbulent time, Curi’s full-service financial advisory firm, Curi Capital, is here to help practices maintain financial wellness in a variety of ways. For more information on the above, and to determine if freezing your cash balance plan is the best course of action for your practice, contact your plan administrator or actuary, or reach out to Joe Dillon, Curi Capital’s Managing Director, Retirement Plan Solutions joe.dillon@curicapital.com. For information about additional financial services available to Curi members, click here. News & Knowledge All Curi recommendations are based on current CDC criteria at the time of publication. CDC guidance for SARS-CoV-2 infection may, or may not, be adopted by state and local health departments to respond to rapidly changing local circumstances. Providers should always check with their local health department to see if the CDC’s guidance on any given topic has been modified (particularly if more restrictive) from the CDC’s recommended guidelines. Follow this link https://www.cdc.gov/publichealthgateway/healthdirectories/index.html for contact information to your state/local health department. If local recommendations vary from those of the CDC, and you are unsure what recommendations to follow, then it is safer to follow the more restrictive guidelines/recommendations.