A Money Purchase Pension Plan is a retirement plan under which employer contributions are based on a fixed percentage of compensation. Contributions are required every year, regardless of earnings or profits.

Employer Advantages
  • American Century Investments® maintains prototype plan and updates it when laws change.
  • Employer contributions are a deductible business expense.
  • Can still contribute to an IRA.1
  • Guaranteed contribution each year.
  • Separate employer website.
  • American Century Investments will issue an annual IRS Form 1099-R to any employee who withdraws money from the plan and will report the withdrawal amount to the IRS.
Eligible Employers Any employer or business structure including corporations, partnerships, sole proprietors and self-employed individuals.
Investment Choices Select from a variety of American Century Investments mutual funds based on your risk tolerance and investment objectives.
Annual Contribution Limits Employer Voluntary-For 2014, up to 25% of compensation or $52,000, whichever is less.2
Employee Contributions are not allowed.
Initial Employee Paperwork Adoption Agreement
Deadline for Establishing Plan Last day of fiscal year, usually December 31.
Annual Fees An annual service fee of $25 per participant applies. The fee is deducted from the participants' accounts on the third Friday of November each year.
Eligibility Requirements Employee has one or two years of service for a set number of hours and is at least age 21.3
Maximum Vesting Schedule Maximum of 6 years.
Withdrawals Must be a qualifying event based on the plan requirements.
Secure Online Account Access Participants create a User Name and Password and Log In for secure online account access, to:
  • View account balances
  • Conduct online transactions
  • View tax forms (if available)
  • And more.
Employers can Log In for secure online plan access, to:
  • View plan assets
  • Transmit contributions
  • Add participants
  • Update participant information
  • Request plan reports
  • View participant transaction history

1Contributions may not be deductible depending on your income level.
2For 2014, contributions may only be based on the first $260,000 of compensation, as adjusted.
3Eligibility requirements may be less restrictive at employer's discretion.

IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

This information is for educational purposes only and not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.