A Money Purchase Pension plan is a retirement program that requires you to make fixed contributions each year, regardless of whether your company makes a profit. The key advantages of a Money Purchase Pension Plan are:

• Employers make an annual, fixed, predetermined contribution to each employee’s retirement account
• The contribution cannot exceed 25% of an individual’s compensation or $45,000 (2007 limit), whichever is less
• The plans must be in place by the last day of the employer’s taxable year for which the contributions will be made

Ideally, clients should establish a Profit-Sharing Plan. Profit-Sharing Plans can now maximize your contributions at 25%, and be discrectionary contributions.