A money purchase plan is a form of qualified retirement plan that requires the employer to make contributions to the plan on an employees behalf. This required contribution is generally determined as a percentage of employee annual income and is the same for all eligible employees (i.e. employees that are part of the plan).
The alternative to this is a profit sharing plan, where funds can be distributed to a plan (if profits exist) and are distributed among employees. This contribution is not, however, required and can be done with more discretion based on employer business results.
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The alternative to this is a profit sharing plan, where funds can be distributed to a plan (if profits exist) and are distributed among employees. This contribution is not, however, required and can be done with more discretion based on employer business results.