Which of these statements about money purchase pension plans is true regarding tax and general characteristics?

Money purchase pension plans are a type of defined contribution plan, which operate under specific regulatory guidelines. One of the defining characteristics of these plans is that they are not subject to the rules and regulations set forth by the Pension Benefit Guaranty Corporation (PBGC). This means that unlike defined benefit plans, which are insured by the PBGC and thus must adhere to certain requirements regarding funding and benefits, money purchase pension plans do not have the same level of oversight.

Since they are considered a type of defined contribution plan, money purchase pension plans are primarily governed by the rules set forth in the Internal Revenue Code regarding contribution limits and tax treatment, rather than PBGC regulations. This is an important distinction because it speaks to the risk and security involved in these types of plans. In addition, the lack of PBGC coverage means that there is no federal insurance in place to protect benefits in the event that these plans are underfunded or terminated.

When considering the other statements, it is clear that they do not align with the characteristics of money purchase pension plans. They do have defined limits on contributions (thus not allowing unlimited annual additions), they do not provide for tax-free withdrawals at retirement in a general sense (rather, withdrawals may be subject to taxation), and