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HomeRecruitment GuideGlossary Terms A-ZMoney Purchase Plan
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Money Purchase Plan

A money purchase plan is a type of retirement plan in which the employer puts away a set amount of money into each employee’s retirement fund. Contributions are made annually, and unlike other retirement plans where the amount put in varies, a money purchase plan requires the amount to be the same from one year to the next regardless of total profits. Contributions made by employers are tax-deferred until the funds are withdrawn. Under this plan, employees cannot contribute money to their own personal retirement accounts. This type of retirement plan is good for businesses looking to attract the best employees from other organizations.

Related Terms

  • Retirement Plan
  • Pension Plan
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    The content on our website is only meant to provide general information and is not legal advice. We make our best efforts to make sure the information is accurate, but we cannot guarantee it. Do not rely on the content as legal advice. For assistance with legal problems or for a legal inquiry please contact you attorney.

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