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Money Purchase

Ascensus Consulting administrators money purchase plans. In a money purchase plan, an employer sets up and contributes to retirement savings accounts for the company’s employees. Eligible employees (plan participants) may also contribute to the plan.

In a money purchase plan, the employer (employer) contributes a fixed percentage of each participant's compensation. Our services for money purchase plans include, among others:
  • Money Purchase Plan Documents
  • Money Purchase Plan Administration
  • Money Purchase Plan Compliance Testing
  • Money Purchase Plan Consultation
  • Money Purchase Plan Multi-Fund Open Architecture Daily Valuation and Recordkeeping
  • Money Purchase Plan Form 5500
  • Money Purchase Plan Design
Similar to a 401(k) plan, a money purchase plan must comply with applicable Internal Revenue codes and the Department of Labor’s Employee Retirement Income Security Act of 1974 (ERISA), which is the federal law that sets minimum standards for operating most voluntarily established tax qualified retirement plans to provide protection for individuals who participate in the plans.

Typical number of employees in the plan: Unlimited number of eligible employees

Features: When the plan is set up, the employer decides to contribute a set amount, usually as a percent of compensation, to the money purchase plan. The set amount is then allocated to the eligible employees’ accounts using a contribution formula specified in the Plan Document.
 
The plan must be tested to ensure that benefits do not discriminate in favor of the highly compensated employees (HCEs). An excise tax will be due if the employer’s required contribution is not made to the plan. Contribution limits are subject to cost of living adjustments established by the Department of Labor. A money purchase plan can be combined with other retirement plans.
 
Contact us for more information.