| Prior to 2002, a Money Purchase Pension Plan could provide for a higher maximum contribution percentage than a Profit Sharing Plan. This is because the 15% of pay limitation applicable to profit sharing plans did not apply to money purchase pension plans.
Beginning in 2002, this difference in the tax deduction limit was eliminated. Most money purchase pension plans have been or will be converted to profit sharing plans to provide employers with more flexibility in determining their contributions from year to year.
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