What Is A Money Purchase Retirement Plan? 
A money purchase plan is a form of qualified retirement plan that requires the employer to make contributions to the plan on an employees behalf . This required contribution is generally determined as a percentage of employee annual income and is the same for all eligible employees -LRB- i.e. employees that are part of the plan -RRB- . The alternative to this is a profit sharing plan , where funds can be distributed to a plan -LRB- if profits exist -RRB- and are distributed among employees . This contribution is not , however , required and can be done with more discretion based on employer business results . 