EMPLOYER CONTRIBUTIONS 24. Money purchase plan -- definite contribution formula

Statement of Requirement: Reg. §§ 1.401-1(b)(1)(i), 1.401(a)(4)-2(b)(2)(i), 1.401(a)(26)-6(b)(7), 1.410(b)-6(f); Rev. Proc. 2023-37, 2023-51 I.R.B. 1491, sec. 9.03(1) & 9.03(3)

Sample Adoption Agreement Language:

For each plan year, the employer will contribute for each participant who either completes more than 500 hours of service during the plan year or is employed on the last day of the plan year an amount equal to ____% (not to exceed 25) of such participant's compensation.

(Note to reviewer: A plan that utilizes elapsed time in lieu of counting hours of service may substitute the completion of either 91 consecutive calendar days or 3

27 | D e f i n e d C o n t r i b u t i o n P l a n L R M P a c k a g e 0 1 / 2 0 2 4

consecutive calendar months for 500 hours of service in the above sample language.)

(Note to reviewer: A Nonstandardized plan may, as an option, require a participant (a) to be employed on the last day of the plan year, and (b) to have completed up to 1,000 hours of service during the plan year to receive an employer contribution.)