Cash Balance Plans for Physicians: Who They Suit, How Much You Can Contribute, and What They Cost to Run

The short answer: once a physician who owns a practice, is a partner, or earns 1099 income has filled a 401(k), the next big pre-tax option is usually a cash balance plan. It can allow annual contributions several times the $72,000 defined contribution limit, but it is a pension the practice must fund every year, with an actuary, annual filings, rules about covering staff, and real costs. It rewards people with high, predictable income and a horizon of several years before they stop working.

Several of our guides mention cash balance plans in passing; this one explains them. Every rule below links to the Internal Revenue Code, Treasury or Labor regulations, the IRS, or the PBGC. Where a point rests on how plan providers usually design plans rather than on the law, we say so, and where we could not verify a number (age-by-age contribution tables and setup fees, mainly) we left it out and explain why.

What a Cash Balance Plan Is

The Code calls a cash balance plan an "applicable defined benefit plan": a defined benefit plan that states each participant's accrued benefit as the balance of a hypothetical account (26 U.S.C. 411(a)(13) and (b)(5)). The account isn't a real, separately invested account. The plan holds one pooled trust, and each participant's account is a bookkeeping entry that grows two ways:

• Pay credits, a percentage of pay or a flat dollar amount the plan document sets for each participant or group of participants.
• Interest credits, at a rate the plan names. It can be fixed (the regulations treat a fixed rate of up to 6% as a market rate) or variable, such as a Treasury yield or the actual return on the plan's assets if they are diversified (26 CFR 1.411(b)(5)-1; 2014 final regulations). The rate can't exceed a market rate of return, and negative interest credits can't leave an account below the total pay credits put into it, a floor the regulations apply when benefits are paid (411(b)(5)(B); 26 CFR 1.411(b)(5)-1).

Because it is a defined benefit plan, the practice promises those accounts and must fund them. Each year an enrolled actuary values the plan and works out the minimum required contribution under section 430 (26 U.S.C. 430) and the maximum deductible contribution under section 404(o) (26 U.S.C. 404(o)), and signs Schedule SB of Form 5500, the actuarial information for single-employer defined benefit plans (IRS Form 5500-EZ instructions). If the trust earns more than the interest credits, future contributions fall; if it earns less, they rise. Participants' accounts don't change with the market unless the plan credits actual returns.

A few more rules set cash balance plans apart. Employer-provided benefits must be fully vested after three years of service (411(a)(13)(B)). The plan can pay the account balance as the lump sum without the older "whipsaw" recalculation that once made such plans hard to run (411(a)(13)(A)). And because it is a pension plan, married participants are entitled to a joint and survivor annuity unless the spouse consents to another form of payment (covered under closing the plan).

Cash balance plan vs. 401(k)

2026 Limits That Apply

It is a benefit limit, not a contribution limit

Section 415(b) limits the annual benefit a defined benefit plan can pay, stated as a straight life annuity, to the lesser of $290,000 (2026) or 100% of the participant's average compensation for the highest three consecutive calendar years (IRS; 26 U.S.C. 415(b)). Compensation above the $360,000 section 401(a)(17) limit can't be counted (26 U.S.C. 401(a)(17)). The contribution is whatever the actuary calculates is needed to fund toward that benefit; there is no separate dollar cap on it.

The 10-year phase-in

With fewer than 10 years of participation in the plan, the dollar limit is multiplied by your years of participation divided by 10. The compensation limit is reduced the same way, but by years of service with the employer. Neither can fall below one-tenth of the full limit (415(b)(5)). So a physician who starts a plan at 57 and stops at 62 has five years of participation and a dollar limit of half of $290,000, even with decades at the practice. This phase-in is why starting earlier raises the lifetime total, even though starting later raises the yearly contribution.

Age 62 to 65

The limit is for a benefit starting between 62 and 65. If the benefit starts before 62, the dollar limit is reduced to the actuarial equivalent of the limit at 62; after 65 it is increased (415(b)(2)(C) and (D); 26 CFR 1.415(b)-1). That is one reason most illustrations, ours included, assume a benefit at 62.

Why Contributions Rise With Age

Most physicians take a lump sum, so the number that matters is the largest lump sum the 415(b) limit allows at retirement. To get it, the actuary converts the annual benefit limit into a single sum using the IRS applicable mortality table and an interest rate that, for lump sums, can't be less than the greatest of 5.5%, the plan's own rate, or the rate that keeps the result within 105% of the value at the section 417(e) rates (415(b)(2)(E)). A lower interest rate or longer life expectancy produces a bigger lump sum, so the maximum moves with the year's tables and with the plan's terms.

Once the target lump sum is known, the contribution is the amount that, with interest credits, reaches it by the retirement age. A 45-year-old has 17 years of credits and interest to get there; a 55-year-old has seven. The same target spread over fewer years means a bigger yearly contribution, which is why cash balance plans favor physicians in their 50s and early 60s.

Illustration: level yearly contribution by starting age

Two patterns show up. Between 45 and 52, the yearly amount roughly doubles, because the same $3,625,000 target is funded over fewer years. At 55, the 10-year phase-in cuts the target to $2,537,500, yet the yearly amount still rises, to $311,655, which is more than the $300,000 salary. Section 415 doesn't cap a defined benefit contribution at a share of pay the way it caps defined contribution additions at 100% of pay; the cap is on the benefit. Whether a given year's amount fits the deduction limit is for the actuary to confirm.

You will find age-by-age tables of "maximum contributions" on plan providers' websites. We don't reproduce one: the published tables we checked disagreed with each other by large amounts, because each rests on its own interest, mortality, retirement-age and salary assumptions, and few state them. Ask an actuary to run your own numbers and to list the assumptions.

Deduction Limits and Deadlines

These are the rules most often misstated in marketing material. Each one is from the Code or IRS guidance.

The cash balance plan's own deduction limit, 404(o)

For a single-employer defined benefit plan, the deductible amount for a year is the greater of the minimum required contribution or the sum of the plan's funding target, its target normal cost and a "cushion amount," minus the plan's assets. The cushion is 50% of the funding target plus the amount the funding target would rise if expected future pay increases were counted (26 U.S.C. 404(o)). In plain terms, the plan can be funded somewhat ahead of what has been promised so far, which gives room to contribute more in a strong year. The IRS notes that for a defined benefit plan an actuary must figure the deduction limit (IRS Publication 560).

The combined limit when you also have a 401(k), 404(a)(7)

When an employer has both a defined benefit plan and a defined contribution plan covering any of the same people, total deductible employer contributions are limited to the greater of 25% of the covered participants' compensation or the defined benefit contribution needed to meet the minimum funding standard (404(a)(7)). Three exceptions do most of the work:

1. The 6% rule. Employer contributions to the defined contribution plan that don't exceed 6% of participants' compensation are ignored; only the amount above 6% counts toward the combined limit (IRS issue snapshot; 404(a)(7)(C)(iii)).
2. Salary deferrals don't count. Elective deferrals aren't subject to the 404(a)(7) limit and aren't counted when it is applied to other contributions (404(n); Notice 2007-28). Matching and profit-sharing contributions do count.
3. PBGC-insured plans are left out. A single-employer defined benefit plan covered by PBGC insurance isn't taken into account at all (404(a)(7)(C)(iv)). Most small physician plans aren't PBGC-covered (see PBGC coverage), so for them the combined limit applies.

Put together: next to a large cash balance contribution, which on its own uses up the combined limit, a practice that isn't PBGC-covered usually holds its 401(k) profit-sharing or matching contribution to 6% of pay, while each person can still make the full salary deferral. A practice whose plan is PBGC-covered isn't bound by the combined limit.

Deadlines and penalties

• Minimum funding: the minimum required contribution for a plan year is due 8 and a half months after the plan year ends; a plan that had a funding shortfall in the prior year must also make quarterly installments (430(j); 26 CFR 1.430(j)-1). Unpaid minimum contributions trigger a 10% excise tax (26 U.S.C. 4971; IRM 7.12.1).
• Deduction timing: contributions made by the due date of the employer's tax return, including extensions, can be deducted for the prior year (Publication 560).
• Over the limit: nondeductible contributions to a qualified plan are generally subject to a 10% excise tax (26 U.S.C. 4972).
• Late setup: since 2020 an employer can adopt a new qualified plan after year-end, up to its tax-return due date with extensions, and treat it as adopted on the last day of the prior year (401(b)(2); IRS).

Worked Example: Solo 401(k) Alone vs. Adding a Cash Balance Plan

Assumptions

• A 52-year-old physician owns a practice taxed as an S corporation, has no employees, and pays herself a W-2 salary of $300,000. She has worked there at least 10 years. We use an S corporation because plan compensation is simply the salary; for a sole proprietor or partner it is net self-employment earnings adjusted for half of self-employment tax and the contributions themselves (IRS), which makes the math circular.
• Cash balance plan: benefit at 62, a 5% fixed interest crediting rate, a lump-sum conversion factor of 12.5, a level pay credit designed to reach the projected maximum lump sum by 62, and plan assets that earn exactly the crediting rate. The dollar limit is held at the 2026 figure.
• Household taxable income of $900,000 before any retirement contributions, married filing jointly, 2026 federal brackets (Rev. Proc. 2025-32). Federal income tax only: no state tax, payroll tax or credits. We chose an income high enough that the qualified business income deduction is fully phased out with or without the plan (taxable income stays above the $553,500 joint threshold for 2026); at lower incomes a large contribution can also restore part of that deduction.
• Her age-50 catch-up ($8,000) is left out of the pre-tax totals: her prior-year FICA wages are over $150,000, so the catch-up must be Roth (IRS). She can still make it in both scenarios.

Step 1: the cash balance contribution

Starting at 52 she will have 10 years of participation at 62, so the full $290,000 limit applies, and her $300,000 salary is above it, so the pay-based limit doesn't bind. At a factor of 12.5, the maximum lump sum is $290,000 × 12.5 = $3,625,000. The level year-end pay credit that grows to that amount in 10 years at 5% is $288,204 a year. Her account would be $1,592,509 after five years and $3,625,000 at 62.

Step 2: the 401(k) next to it

• 401(k) alone: $24,500 salary deferral plus an employer profit-sharing contribution of up to 25% of pay ($75,000), cut to $47,500 because total additions can't exceed $72,000. Pre-tax total: $72,000.
• 401(k) with the cash balance plan: the same $24,500 deferral, but profit sharing held to 6% of pay ($18,000) because her plan isn't PBGC-covered (it covers only an owner). 401(k) total: $42,500.

Step 3: the result

The cash balance plan adds $258,704 of pre-tax savings a year and defers about $91,732 more federal income tax in this year. The first $131,300 of the deduction saves 37% and the rest 35%, because the contribution pulls her from the top bracket into the one below.

Three things the example doesn't show:

1. Deferred, not forgiven. The money is taxed as ordinary income when it comes out. The benefit depends on paying a lower rate later than the rate saved now, plus years of tax-deferred growth.
2. Real costs. Actuarial, administration and investment fees come off the top every year (see costs).
3. Real markets. The example assumes the trust earns exactly 5%. The next sections show what a bad year does.

For the S corporation salary question that sits under this example, see the S-corp tax savings calculator.

Who a Cash Balance Plan Suits

Usually a fit

• Practice owners and partners in their late 40s to early 60s with high, steady income who already fill a 401(k). The age mechanics above are why: the same benefit costs more per year the closer you are to retirement, so the plan allows more.
• 1099, locum and consulting physicians with a solo 401(k) and substantial, predictable self-employment income. The business that earns the income sponsors the plan. Our 1099 physician taxes guide covers the self-employment side, and locum tenens pay the income side.
• Physician groups that want more tax deferral than a 401(k) profit-sharing plan allows. A plan can define pay credits for different groups (for example, partners and staff), subject to the nondiscrimination rules below, so partners at different ages can fund different amounts.
• DPC and concierge physicians with established, profitable panels; our DPC and concierge economics guide covers the income ramp.

Usually not a fit

• Employed W-2 physicians, for their W-2 pay. Only an employer can sponsor a qualified plan, so you can be in a cash balance plan for your salary only if your employer offers one, as some large groups and health systems do (our Kaiser salary guide notes cash balance pensions in some of its regional medical groups). Side 1099 income can support a plan of its own, but with modest side income the benefit, capped at 100% of pay from that business, and a self-employed person's plan compensation, which is reduced by the contributions themselves, often leave little room.
• Anyone with uneven income who can't count on meeting a required contribution for several years: early in a practice, mid-buy-in, or expecting a sale soon.
• Practices with many younger staff, where the cost of the required staff benefits can outweigh the owners' tax savings. Have the actuary price it before you commit.
• Physicians who expect a higher tax rate in retirement than now, or who haven't yet used cheaper options: the 401(k), an HSA, a backdoor Roth IRA, and, where the plan allows, a mega backdoor Roth.

Staff, Coverage and Nondiscrimination

A plan that covers only the owner (or owner and spouse) has no staff to test. Once the practice has eligible employees, three sets of rules decide who must be covered and how much they must get. They are technical, the actuary runs them every year, and the summary below is general.

1. Minimum participation, 401(a)(26). A defined benefit plan must benefit at least the lesser of 50 employees or the greater of 40% of all employees or two employees (one, if there is only one employee) (26 U.S.C. 401(a)(26); 26 CFR 1.401(a)(26)-2). In a two-physician practice where only one physician wants in, the plan fails this test unless it benefits a second employee.
2. Coverage, 410(b). The plan must cover enough non-highly compensated employees relative to highly compensated ones, by the ratio percentage test or the average benefits test (IRS guide to common qualified plan requirements). A highly compensated employee is, broadly, a more-than-5% owner or someone paid above the threshold ($160,000 for 2026) in the look-back year (Notice 2025-67).
3. Nondiscrimination, 401(a)(4). Benefits can't discriminate in favor of highly compensated employees. Plans are usually tested on the benefits they provide, combining the cash balance plan and the 401(k). When a combined plan is tested that way, the regulations generally require a minimum "gateway" allocation for non-highly compensated employees: the lesser of one-third of the highest HCE's rate or 5% of pay when that rate is 25% or less, rising in steps to 7.5% when it is above 35%; giving every non-highly compensated participant at least 7.5% of pay satisfies it (26 CFR 1.401(a)(4)-9(b)(2)(v)(D)).

A common design, as plan providers describe it, gives staff most of their required benefit through a profit-sharing contribution in the 401(k), within the 6% rule above, and gives the physicians most of theirs through cash balance pay credits. Whether that works, and what it costs per employee, depends on staff ages and pay, so we don't quote a percentage; ask for a design that shows each employee's cost. Cash balance accounts vest fully after three years of service. Credits forfeited by staff who leave sooner can't be used to increase anyone else's benefit (401(a)(8)), so they lower the practice's future contributions instead.

PBGC Coverage: Most Small Physician Plans Are Exempt

The Pension Benefit Guaranty Corporation insures most private defined benefit plans, and covered plans pay annual premiums. Two exemptions in ERISA section 4021 matter for physicians (PBGC):

• Professional service employers with 25 or fewer active participants. A plan is exempt if it is maintained by a professional service employer and has not, at any time since September 2, 1974, had more than 25 active participants (PBGC; ERISA 4021(b)(13)). Physicians are among the professions the statute lists, and the employer must be owned or controlled by professionals in the same profession. The test looks back over the plan's whole history: partners count as active participants (PBGC Opinion Letter 89-10), and a plan that once passed 25 stays covered.
• Plans only for substantial owners. A plan established and maintained exclusively for substantial owners is exempt (ERISA 4021(b)(9)). A substantial owner is someone who, in the past 60 months, owned the whole of an unincorporated business, or more than 10% of a partnership's capital or profits, or more than 10% of a corporation's voting stock or all its stock (PBGC).

A covered single-employer plan pays, for 2026, a flat premium of $111 per participant plus a variable-rate premium of $52 per $1,000 of unfunded vested benefits, capped at $751 per participant (PBGC premium rates; 2026 filing instructions). Coverage has a trade-off: a PBGC-covered plan is left out of the 404(a)(7) combined deduction limit, so a larger practice with a covered plan isn't held to the 6% rule for its 401(k). If you aren't sure whether your plan is covered, the PBGC accepts requests for a coverage determination.

Funding Risk, Flexibility and the Permanency Rule

The interest crediting rate choice

With a fixed crediting rate (up to 6%), the accounts grow at that rate whatever the markets do, and the practice absorbs the difference. With an actual-return rate, the accounts move with the trust's diversified investments, so assets and accounts stay close and required contributions are steadier; the trade-off is that the accounts can fall in a bad year, although never below total pay credits at the time benefits are paid (26 CFR 1.411(b)(5)-1; 411(b)(5)(B)). Changing the rate later is restricted: the right to future interest credits on existing accounts is protected, so a change generally has to preserve the old rate for benefits already earned (IRS issue snapshot).

What a bad year does

Take the worked example after five years: the accounts total $1,592,509 and, by assumption, so do the assets. In year six the plan credits 5% but the trust loses 15%. The pay credit goes into both, so it cancels out, and the gap that opens is $1,592,509 × (5% + 15%) = $318,502. Under a fixed crediting rate the practice still owes every account its 5%.

That shortfall is not due all at once. Under the minimum funding rules, a funding shortfall is amortized over 15 years (Notice 2021-48; 26 U.S.C. 430(c)), which raises later minimum contributions, while the deduction limit, which counts the shortfall, lets you make it up faster if you want to. The actuary measures it against the funding target (the present value of benefits earned, at IRS segment rates), not against the account totals, so the real number differs. The point holds: in a fixed-rate plan, a market drop late in a short plan's life lands on the owner's cash flow.

Overfunding

The opposite problem comes from strong returns or conservative assumptions. A surplus lowers future required contributions, but at termination, assets above what the plan can pay within each participant's 415 limit can't simply go to the owner. Money that reverts to the employer is taxable income to the employer plus an excise tax of 50%, or 20% if the employer moves at least 25% of the surplus to a qualified replacement plan or uses it for pro rata benefit increases (26 U.S.C. 4980). This is why actuaries watch funding closely in the last few years before a planned shutdown.

Changing the contribution from year to year

• Within a year: once the plan has some cushion, the contribution can usually be any amount from the minimum required (section 430) to the maximum deductible (section 404(o)).
• By amendment: the plan can be amended to lower future pay credits, but not to reduce benefits already earned (411(d)(6)). An amendment that significantly reduces future accruals generally requires advance written notice to participants (26 U.S.C. 4980F). Timing matters, so plan changes before the year's credits are earned.

The permanency requirement

A qualified plan must be a permanent program, not a temporary one. The regulations say that abandoning a plan for any reason other than business necessity within a few years after it takes effect is evidence that it was never a bona fide plan, judged on all the facts, including the employer's ability to keep contributing (26 CFR 1.401-1(b)(2)). The IRS's examiners' manual lists bankruptcy or insolvency and discontinuance of the business as valid reasons, and says that without one a plan that ends soon after adoption can lose its qualified status retroactively (IRM 7.12.1). The regulation doesn't set a number of years, so set one up only if you expect to keep it running for several, and keep a record of the business reason if you end it early.

What It Costs to Set Up and Run

We looked for a published, verifiable range of setup and annual fees and didn't find one we could stand behind: providers quote by plan and many don't post prices. So here are the components to get priced, in writing, from every provider you consider.

1. Plan document and setup: a cash balance plan needs a written defined benefit plan document and a trust; ask whether the document is pre-approved by the IRS or individually designed.
2. Annual actuarial valuation: the funding calculation, the contribution range for the year, and the enrolled actuary's signed Schedule SB.
3. Annual return: a one-participant plan files Form 5500-EZ, though none is required for a year when the total assets of all the employer's one-participant plans are $250,000 or less at year-end, except the final year; the completed Schedule SB is kept with the plan's records (Form 5500-EZ instructions). A plan covering employees files Form 5500 or 5500-SF. The return is due by the last day of the seventh month after the plan year ends.
4. Nondiscrimination and coverage testing each year if the practice has staff.
5. Investment management and custody of the trust, which pays fees of its own.
6. ERISA fidelity bond for a plan covering employees: each person who handles plan funds must be bonded for at least 10% of the funds handled, with a $1,000 minimum and, for most plans, a $500,000 maximum (DOL Field Assistance Bulletin 2008-04). A plan covering only owners isn't an ERISA Title I plan (see below), so this doesn't apply to it.
7. PBGC premiums only if the plan is covered: $111 per participant for 2026 plus any variable-rate premium.
8. Amendments, participant notices, distributions and termination, often billed separately.

Compare the total annual cost with the federal tax the plan defers for you. In our example the plan defers $91,732 a year more than the 401(k) alone, so fees are a small share; for a smaller contribution, they can be a large one.

Closing the Plan: Termination, Lump Sums and Rollovers

1. Terminate, don't just stop. A plan you no longer want is formally terminated. The actuary confirms whether assets cover the benefits, any required contributions still owed for earlier years are paid, and a final return is filed for the year the last assets are paid out, even for a one-participant plan under the $250,000 threshold (Form 5500-EZ instructions). PBGC-covered plans also follow the PBGC's termination process.
2. Choose a form of payment. A defined benefit plan must offer married participants a qualified joint and survivor annuity. Taking a lump sum or any other form requires the spouse's written consent, witnessed by a plan representative or a notary (IRS). Paying a married participant a lump sum without valid consent is an operational failure that can cost the plan its qualified status unless corrected (IRS).
3. Roll it over. A lump sum is an eligible rollover distribution that can go directly to a traditional IRA or to a 401(k) that accepts rollovers, with no current tax. If it is paid to you instead, the plan must withhold 20% for federal tax, and you have 60 days to roll it over (IRS). Money you keep is ordinary income, and if you are under 59 and a half it may also owe the 10% additional tax unless an exception applies (IRS Topic 558). Rolling into a solo 401(k) rather than an IRA keeps the balance out of the way of a later backdoor Roth, whose pro-rata rule counts traditional IRA balances.
4. Deal with any surplus or shortfall. See overfunding above for the reversion tax; a shortfall is handled according to the plan's terms and whether the PBGC covers it.

In a divorce, a cash balance plan is divided by a qualified domestic relations order like other pensions, and getting the order's language right matters more for defined benefit plans; see our physician divorce guide. If you are selling the practice, raise the plan early: buyers and their counsel will want to know whether it will be terminated before closing, and our practice sale guide covers the rest of the process.

Creditor Protection

Protection depends on whether the plan is covered by Title I of ERISA, and that depends on who is in it.

• Plans that cover employees are ERISA plans, and ERISA requires every pension plan to bar assignment or alienation of benefits (29 U.S.C. 1056(d)). The Supreme Court has held that a working owner can be a participant in such a plan along with the employees (Yates v. Hendon, 2004).
• Plans that cover only owners, a sole owner and spouse or only partners, aren't ERISA Title I plans (29 CFR 2510.3-3(b) and (c)). In bankruptcy, the federal exemption for retirement funds in tax-qualified plans still applies (11 U.S.C. 522(b)(3)(C)). Outside bankruptcy, protection comes from state law, which varies.
• After a rollover to an IRA, the federal bankruptcy dollar cap on IRAs doesn't count amounts rolled over from a qualified plan (11 U.S.C. 522(n)), but outside bankruptcy an IRA's protection is again a matter of state law.

This is general, and the details turn on your state. Our physician asset protection guide covers how retirement accounts fit with malpractice coverage, umbrella policies and entity planning.

Should You Add One? A Decision Checklist

1. Are the cheaper accounts full? 401(k) or solo 401(k) deferral and employer contribution, HSA, backdoor Roth IRA. Our 2026 limits guide lists them all.
2. Is the income high and steady enough to fund the minimum every year for at least several years, in a bad market year too?
3. Is the age right? Have the actuary show the allowed contribution at your age and at a few later starting ages; the closer you are to the plan's retirement age, the larger it is.
4. Is the tax trade good? Compare the marginal rate the contribution saves now with the rate you expect when the money comes out. Our physician tax strategies guide covers the rest of the picture.
5. What will staff cost? Get each employee's required benefit in the proposal.
6. When do you expect to stop? A sale, retirement or move within a few years cuts against setting one up.
7. Do the fees make sense against the tax deferred?

Questions to ask a plan provider or actuary

1. What interest crediting rate do you propose, and what happens to my required contributions in a year the trust loses 15%?
2. What interest rate, mortality table, retirement age and pay assumptions produce your contribution figure, and what is the range between the minimum and maximum contribution in each of the first three years?
3. Is the plan exempt from PBGC coverage, and if so, under which exemption?
4. How will the 401(k) be coordinated, and will the employer contribution be held to 6% of pay?
5. What does each employee cost under the design, and how does that change as staff turn over?
6. What are your fees for setup, annual administration, the valuation, Form 5500, amendments, distributions and termination?
7. Who is the enrolled actuary who signs Schedule SB, and who is the plan's trustee and custodian?
8. How do you manage funding as I approach the date I plan to stop, so the plan isn't badly over- or underfunded?

A CPA should review any proposal alongside your entity structure and the qualified business income deduction. If you want help choosing an advisor who works with practice plans, see our financial advisors for physicians review.

Sources

1. Notice 2025-67: 2026 amounts relating to retirement plans and IRAs, IR-2025-111, and COLA increases for dollar limitations on benefits and contributions, IRS.
2. Retirement topics: defined benefit plan benefit limits, Retirement topics: 401(k) and profit-sharing plan contribution limits, and Retirement topics: catch-up contributions, IRS.
3. 26 U.S.C. 415 (benefit limits, phase-in, age and interest adjustments) and 26 CFR 1.415(b)-1, Cornell LII.
4. 26 U.S.C. 404 (404(a)(7), 404(n), 404(o)), Cornell LII; Combined limits under IRC section 404(a)(7), IRS issue snapshot; Notice 2007-28, IRS.
5. 26 U.S.C. 430, 26 CFR 1.430(j)-1, 26 U.S.C. 4971, and 26 U.S.C. 4972; Notice 2021-48 (15-year shortfall amortization), IRS.
6. 26 U.S.C. 411 (vesting, hybrid plan rules, anti-cutback), 26 CFR 1.411(b)(5)-1 (market rate of return), Additional rules regarding hybrid retirement plans (Federal Register, September 19, 2014), and How to change interest crediting rates in a cash balance plan, IRS issue snapshot.
7. 26 U.S.C. 401 (401(a)(17), 401(a)(26), 401(b)(2)), 26 CFR 1.401(a)(26)-2, 26 CFR 1.401(a)(4)-9, and 26 CFR 1.401-1, Cornell LII; A guide to common qualified plan requirements, IRS.
8. 26 U.S.C. 4980 (reversions) and 26 U.S.C. 4980F (notice of reduced accruals), Cornell LII.
9. Internal Revenue Manual 7.12.1, Plan terminations, IRS.
10. Publication 560: Retirement plans for small business, Calculation of plan compensation for sole proprietorships, for partnerships, and Deductibility of employer contributions made after the end of the tax year, IRS.
11. Instructions for Form 5500-EZ, IRS.
12. Retirement topics: qualified joint and survivor annuity, Rollovers of retirement plan and IRA distributions, and Topic 558, IRS.
13. Rev. Proc. 2025-32 (2026 tax brackets and the qualified business income thresholds), IRS.
14. PBGC insurance coverage, Professional service employer plan, Opinion Letter 89-10, Premium rates, and Comprehensive premium filing instructions for 2026 plan years, Pension Benefit Guaranty Corporation.
15. Field Assistance Bulletin 2008-04 (fidelity bonds), U.S. Department of Labor; 29 CFR 2510.3-3 and 29 U.S.C. 1056, Cornell LII.
16. Yates v. Hendon, 541 U.S. 1 (2004) and 11 U.S.C. 522, Cornell LII.

Rules and limits checked November 6, 2026. The plan-design descriptions marked as common practice come from how plan providers describe their designs, not from the law.