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Is a cash-balance plan better than a pension?

A cash-balance plan is great if you're young and plan on job-hopping. But if you work for one company for a very long time - good luck pulling that off these days! - the total amount you'll get from a traditional pension plan is typically bigger than what you'll get from a cash-balance plan. That's because the formula for a traditional pension gives heavy weight to your average salary over the last few years of employment. With a cash-balance plan, it's a simple average of every year's salary.

But it's not like you're going to be able to choose between them anyway. Generally, a company offers one or the other - or none at all.

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