In a Money Purchase Plan, the annual employer contribution is defined by a formula written in the plan document and is not discretionary. The annual contribution limit for any participant can be set at any contribution percentage not to exceed 25% of his/her total compensation with annual limitations per participant. This plan also generally favors younger participants. The benefit at retirement will be the accumulation of all contributions and earnings to a participant’s account. This plan is not considered to be as flexible as a Profit Sharing plan and does not allow employee contributions.