The number of cash balance plans has nearly quadrupled since 2001, according to a new report.

Published by Louis Kravitz & Associates Inc., Encino, Calif., the report finds that 4,797 cash balance pension plans were active in 2007 (the most recent year for which IRS pension plan data is available), up from 1,337 in 2001. This represents a 359% increase over the 6-year period.

Cash balance pension plans use a year by year funding formula, rather than a formula that assumes employees will spend most of their careers at a single employer.

“More business owners than ever are seeking to accelerate retirement savings and reduce taxes by adding a cash balance plan,” says Kravitz President Dan Kravitz. “Many employers can double their own pre-tax retirement savings and affordably enhance benefits for their employees at the same time.”

Among the report’s other findings:

–Small and mid-size businesses drive cash balance plan growth: 80% of cash balance plans are in place at firms with fewer than 100 employees. The majority of cash balance plans (63%) have fewer than 36 participants.

–Plan combinations are a key strategy: 79% of cash balance plans are combined with a profit-sharing or 401(k) plan. And more than half of those plans use new comparability testing.

–Medical groups adopt cash balance plans at higher rates: Medical and dental groups account for 34% of cash balance plans, followed closely by other professional, scientific and technical companies at 12%. Legal and financial service firms account for 8% each.

–Regional concentration: California and New York account for 26% of all cash balance plans, with Ohio, New Jersey and Illinois close behind.

Recent market turmoil, rising tax rates and legislative changes are all contributing to the increasing popularity of cash balance plans, the report concludes.