Q: 13
Which of the following correctly describe differences between a profit-sharing plan and a money purchase plan?
I. An employer can elect to make no contribution to a profit-sharing plan in a bad year, but the employer must make contributions to a money purchase plan, regardless. II. Only employers make contributions to profit-sharing plans whereas both employers and employees can contribute to a money purchase plan. III. A profit-sharing plan is a defined benefit plan whereas a money purchase plan is a defined contribution plan.
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