401(a) Plans / Money Purchase Plan Definition by Rocco Beatrice
A 401(a) plan is also referred to as a Money Purchase Plan. The 401a is defined as a type of retirement savings plan that allows you to save for retirement. 401(a) plans are offered by your employer and contributions can be made by yourself, your employer or by both. The contributions that are made to the account can be mandatory or voluntary. Your employer will determine if the contributions are to be made on a pre-tax or after-tax basis.
If your employer has a pick-up provision,
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There are many benefits to participating in a 401(a) plan offered by your company. If you choose to contribute,
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If the 401(a) plan is administered by the ICMA-RC, there are additional benefits. You will be able to choose from many investment options. In most cases,
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Always be aware of any restrictions your employer may have. Some employers will have mandatory contributions. If this is the case, you are not allowed to cease contributions. Be aware of mandatory contributions. When you enroll in the plan,
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