If your organization sponsors a profit share or money purchase plan, your employer may make a retirement contribution on your behalf.
Profit Share
With a profit-sharing plan, your employer may decide, based on profits or other factors, to make a contribution to the plan for that year, and if so, how much. At the end of the year, contributions are divided among eligible employees, usually based on compensation.
Money Purchase
Money purchase pension plans are similar to profit share plans, except that the amount your employer contributes to the plan is a set amount specified in the plan, regardless of profits. The amount the employer contributes on your behalf is usually based on your compensation.
