Money purchase plans require the employer to make contributions each year, typically a fixed percentage of each employee's salary, regardless of the company's profitability. Employee contributions are not allowed in this type of plan. Money purchase plans are a type of defined contribution plan, not a defined benefit plan.

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Money Purchase Plans

Question 53

Multiple Choice

Money purchase plans

A) Mandates that the employer contribute each year even if the company made no money.
B) Allow for employee contributions.
C) Are defined benefit plans
D) none of the above

Correct Answer: