Plan Assets in a Cash Balance Plan Conversion (Posted January 15, 2006) Technical Tip 61: The following question and answer are from the DOL/EBSA website: What happens to the assets in a plan when an employer converts its traditional defined benefit plan formula to a cash balance plan formula? DOL Response: When an employer amends its plan to convert the plan's traditional defined benefit plan formula to a cash balance plan formula, the plan's assets remain intact and continue to back the pension benefits under the plan. Employers cannot remove funds from the plan, unless the plan has been terminated and has assets remaining after payment of all of the benefits under the plan. Comment by the RLR&C ERISA attorneys: Because of the controversy surrounding conversion to cash balances plans, we are providing a series of DOL questions and answers from their website concerning cash balance plans. These tips form a predicate for understanding the complex issues facing the DOL with respect to cash balance plans, including age discrimination and cut back in accrued benefits. View all Tips © 2012 Reish Luftman Reicher & Cohen, a Professional Corporation Important notice: Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner's situation. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of your situation.