Highly proficient with the intricacies of defined contribution plan administration, Nat's in-depth understanding of the Employee Retirement Income Security Act (ERISA), Department of Labor (DOL) and Internal Revenue Service (IRS) compliance regulations having assisted hundreds of employers of corporate sponsored 401k, profit sharing and money purchase plans
with 1 to 2,000 participants.
They had suffered from the move away from final salary pension schemes to less generous money purchase plans
and when they come to claim the state pension it will make up a smaller proportion of their previous earnings.
A 401(k) plan can provide annuity distribution options to participants in the same manner that money purchase plans
typically provide them.
A cash balance plan works somewhat like a money purchase pension plan discussed in Chapter 16, but money purchase plans
do not involve employer guarantees of the rate of return.
The National Association of Pension Funds said default funds - also known as money purchase plans
- should shift members' money away from shares to safer investments as they approach retirement.
Munnell critically evaluates the implications of shifting from DB to 401(k) plans, as well the shift to money purchase plans
in the United Kingdom.
Money purchase pension plans are described at "MONEY PURCHASE PLANS
The proposed regulations apply mainly to defined benefit pension plans and money purchase plans
, not to 401(k) plans and other types of retirement plans, the IRS officials emphasize.
As a result, 401(k) plans have become more attractive options than SEP-IRAs, Simple IRAs or profit-sharing or money purchase plans
. In addition, most plans accept rollovers of existing retirement plan assets.
First, percentage contribution limits for profit sharing plans have increased from 15 percent of compensation to 26 percent of compensation, making money purchase plans
People with private pensions or company money purchase plans
must use their pension pot to buy an annuity, which guarantees them an income for life, before they are 75.