Money Purchase Plan

An employer-sponsored qualified-retirement-plan, established by an employer for the benefit of its employees and their beneficiaries.

 

Money purchase pension plans are defined contribution plans and are funded with employer contributions.

 

Contributions to money purchase pension plans are mandatory.

 

Earnings in a money purchase pension plan accrue on a tax-deferred basis. Contributions and earnings are taxable to the participant when withdrawn from the participant’s money purchase pension account.

 

(Source: Retirement Dictionary)