What is a tax characteristic common to both money purchase pension plans and defined benefit plans?

The statement that both money purchase pension plans and defined benefit plans are subject to minimum funding and joint and survivor requirements is accurate. These types of retirement plans must adhere to specific rules established by the Internal Revenue Code to ensure that they maintain adequate funding levels, thereby protecting plan participants’ benefits. This minimum funding requirement ensures that enough assets are set aside to meet the plan's future liabilities, which is critical for the security of the participants’ retirement income.

Additionally, the joint and survivor requirements are designed to provide a certain level of financial protection for surviving spouses or beneficiaries, ensuring that they receive a portion of the benefits after the participant's death. This aspect is particularly relevant in defined benefit plans and money purchase plans where benefits can be structured to provide ongoing support for dependents.

The other options do not represent tax characteristics that are commonly shared by both types of plans. Not all plans require employee contributions or allow unlimited in-service distributions, and tax-free withdrawals are typically not a standard feature in these plans. Therefore, the focus on minimum funding and joint and survivor requirements highlights key regulatory provisions that ensure the financial integrity and participant protections in both types of pension plans.