Practical Law Glossary Item 0-502-9022 (Approx. 3 pages)
Glossary
Money Purchase Plan
Also known as a money purchase pension plan. A defined contribution plan that provides for an individual account for each participant to which the employer makes contributions. Employer contributions are based on a fixed percentage of an employee's annual compensation. Benefits under a money purchase plan are generally distributed as annuity payments over the remainder of the participant's lifetime. A plan may provide for additional forms of payment.