The report pegs the number of cash balance defined benefits plans in 2012 at 9,115, up from 7,926 in 2011.

The number of cash balance retirement plans increased by 15 percent between 2011 and 2012, according to new research.

Kravitz Inc., Los Angeles, released this finding in its “2013 National Cash Balance Research Report.” The annual survey is based on cash balance retirement plan data from the most recent IRS form 5500 form filings.

The report pegs the number of cash balance defined benefits plans in 2012 at 9,115, up from 7,926 in 2011, 7,064 in 2010 and 5,840 in 2009.

“The popularity of cash balance plans has soared since 2001, with double-digit annual growth each year of the decade and a total increase of almost 500 percent in 10 years,” the report states. “These hybrid plans combine the high contribution limits of a traditional defined benefit plan with the flexibility and portability of a 401(k) plan. They also avoid common risk factors and runaway costs involved in traditional defined benefit plans.”

One factor fueling the rise of cash balance plans, the report adds, is the 2006 Pension Protection Act. The legislation affirmed the legality of the plans and eased plan administration. The number of cash balance plans nationwide has more than tripled since the PPA’s enactment. Between 2006 and 2011, the number of plans grew to 5,244, up from 1,684 during the 2000-2005 timeframe.

Also contributing to rising demand is the 2010 Cash Balance regulations, which expanded options for interest crediting rates and minimized some funding issues.

Small to mid-size businesses are driving the market’s growth. Companies with 25 to 99 plans account for 12.5 percent of the total or 994 out of 7,926 plans. Companies with 10 to 24 employees nab a quarter (25.6 percent or 2,028 plans) of market-share. Those with 1 to 9 employees represent nearly half (48 percent or 3,805) of cash balance plans.

The report adds that companies typically double contributions to employee retirement savings when adding a cash balance plan:

6.2 percent of pay: average contribution non-owner employees in companies with both cash balance and 401(k) plans;

2.5 percent of pay: average employer contribution to non-owner employees in companies with a 401(k) only.