How the contribution range is set

Three numbers each year

The range, conceptually

Minimum required contribution: must deposit
Pay credits for the year (the plan's target): usually inside the range
Maximum deductible contribution: can deposit and deduct

As an example for a plan that has existed for 5 years (with a $100,000 annual pay credit), a realistic scenario is: minimum required $40,000; recommended contribution $100,000; maximum recommended contribution $250,000.

The minimum

Under IRC section 430, the minimum required contribution is roughly:

the value of benefits earned this year (the target normal cost), which in a Cash Balance plan is close to the year's pay credits, plus
one-fifteenth of the funding shortfall (if any), adjusted each year
if there is an excess instead of funding shortfall, benefits earned are reduced by the excess (lowering the minimum, potentially to $0)

Missing the minimum triggers an automatic 10% excise tax on the unpaid amount, so the minimum should be funded timely.

The maximum

Under IRC section 404(o), the maximum deductible contribution starts with similar liabilities, the funding target (the interest rates used are slightly different, so the liabilities are generally a little larger than used in the minimum valuation) and adds a cushion: 50% of the plan's funding target. That cushion is why the maximum is often far above the minimum, especially as the plan ages. The general formula for the maximum is:

the target normal cost, plus
the funding target, plus
the cushion amount (generally 50% of the funding target), minus
the value of plan assets

Why a range helps owners

A good year: optionally deposit toward the maximum, take a larger deduction, and build a cushion.
A slower year: deposit closer to the minimum. A cushion built earlier can reduce it further, if needed.
The plan still has to be funded. A range offers flexibility within a year. The actuary may recommend prospective formula changes based on the funding amount chosen. See Timing and changing contributions.

When there is also a 401(k)

EXTREMELY IMPORTANT: When one employer sponsors both plans, the deduction for employer contributions to the 401(k) side is generally limited to 6% of eligible pay (reduced from the normal 25% limit). Employee salary deferrals don't count toward that 6%. Plans covered by the PBGC are exempt from this combined limit (ie, the 401(k) deduction limit remains 25%) See Pairing with a 401(k).