Money-Purchase Pension Plan(redirected from Money-Purchase Pension Plans)
Money-Purchase Pension Plan
A defined contribution pension in which an employer must contribute an amount equal to a certain percentage of the employee's compensation, usually 25%. While the amount of employer contribution is fixed, the amount of benefit is not. There are also penalties associated with receiving payments from the pension before retirement. These contributions are tax-deductible for the employer and guarantee the employee a certain amount of principal in the pension plan.