Money purchase plan

(redirected from Individual Account Plan)

Money purchase plan

A defined benefit contribution plan in which the participant contributes some part and the firm contributes at the same or a different rate. Also called an individual account plan.

Money Purchase Plan

An employer-contribution retirement plan in which the employer is required to place a certain amount in the retirement account each year. Usually this is a certain percentage of the employee's wages or salary. The employer is required to contribute the agreed-upon amount regardless of how the company performs in a given year. This reduces the risk for the account holder, but increases the risk for the employer. It is also called an individual account plan.

money purchase plan

A defined-contribution pension plan in which the employer contributes a specified amount of cash rather than shares of stock or a percentage of profits.

Money purchase plan.

A money purchase plan is a defined contribution retirement plan that requires the employer to contribute a fixed percentage of each employee's salary every year the plan is in effect.

The contributions must be made regardless of how well the company does in a given year. In contrast, in profit-sharing plans, the employer's contribution is more flexible because it is based on annual profits.

However, some small-company employers or self-employed people create a paired plan that combines money purchase with profit sharing. Paired plans require them to add at least a minimum percentage of each employee's salary to the plan each year.

References in periodicals archive ?
101-3, provide that the administrator of an individual account plan is required to provide 30 days advance notice to participants and beneficiaries whose rights under the plan will be temporarily suspended, limited or restricted by a blackout period (i.
The DOL has also issued notice of a proposed class prohibited transaction exemption that would permit a "qualified termination administrator" (QTA) of an abandoned individual account plan to select and pay fees to itself or to an affiliate for performing termination-related services to the plan.
While any individual account plan can offer a variety of choices regarding contributions, investments, and withdrawals, the choice of whether or not to participate is fundamental to a voluntary approach.
District Court for the Southern District of Texas in 2001 is a 401(k) plan, an individual account plan, called the "savings plan.
The share of lost benefits recoverable by workers under the individual account plan depends on several factors, the most important of which is the rate of return.
This applies to any defined benefit plan or individual account plan subject to minimum funding standards.
The Motion Picture Industry Pension Plan, the Motion Picture Industry Individual Account Plan, and the Motion Picture Industry Health Plan are three separate multi-employer, multi-union, Taft-Hartley, labor/management trust funds governed by ERISA.
Here there is no question of forfeiture, but if the account is part of an individual account plan and not used up by the end of the year, it must be allocated to participants' accounts in accordance with Internal Revenue Service (IRS) rules that prohibit unallocated funds.
Regulations under ERISA Section 404(c) state that where a participant or beneficiary exercises control over the assets in his individual account in an individual account plan (e.
Investment designation by participants (earmarking) is not available in a cash balance plan, because the plan is not technically an individual account plan under ERISA section 404(c).
404(c) plan is an individual account plan (generally a profit-sharing, Sec.
The bad news: Using an acceptable method of determining substantially equal periodic payments, which are fixed in amount, may cause an individual's assets in an individual account plan or an IRA to be exhausted.

Full browser ?