A traditional defined benefit plan — one that defines the retiree's monthly benefit at retirement age — can host a §401(h) sub-account on the same mechanical basis as a cash balance plan.
What is the same
All the §401(h) rules apply identically: 25% subordination, separate accounting, §213(d) expense definition, employer-funded only, distributions limited to qualified retiree medical.
What is different
Traditional DB contributions are determined by actuarial liability for the future pension benefit, which can swing year to year with interest rates and demographics. §401(h) contribution capacity moves with the DB contribution, so capacity is less predictable than under a cash balance design.
Where traditional DB still wins
For a long-tenured owner approaching retirement, a traditional DB can produce contributions well in excess of what a cash balance plan would generate, creating a correspondingly larger §401(h) capacity.