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Defined Contribution Pension Plan Money Purchase Plan


Definition of "Defined contribution pension plan (money pur-chase plan)"

Jill																							 Harris
  Keller Williams Realty

Retirement plan under which contributions are fixed in advance by formula, and benefits vary. These plans are often used by organizations that must know what the cost of employee benefits will be in the years ahead. For example, nonprofit organizations such as charities need to project future pension expenses that will not rise above a preset limit. This enables budgets to be established that provide guidelines for their solicitation of funds.



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