The Retiree Health Account (RHA) and the new Cash Balance Plan (CBP) are both vehicles that receive spillover contributions from the PRAP when company contributions exceed IRS Section 415(c) limits — but they serve different purposes. RHA funds are restricted to qualified healthcare reimbursements in retirement, making them a tax-advantaged tool for managing medical expenses. The CBP is a supplemental retirement account that may be invested and distributed more broadly at retirement, including via lump sum or rollover to an IRA. Pilots may elect annually between the two destinations for spillover contributions, and the right allocation depends on your projected healthcare costs, investment horizon, and retirement income strategy.
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