|Money purchase plan|
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Definition of Money purchase plan
Money purchase plan
A defined benefit contribution plan in which the participant contributes some part and
Commonly referred to as an RPP this is a tax sheltered employee group plan approved by Federal and Provincial governments allowing employees to have deductions made directly from their wages by their employer with a resulting reduction of income taxes at source. These plans are easy to implement but difficult to dissolve should the group have a change of heart. Employer contributions are usually a percentage of the employee's salary, typically from 3% to 5%, with a maximum of the lessor of 20% or $3,500 per annum. The employee has the same right of contribution. Vesting is generally set at 2 years, which means that the employee has right of ownership of both his/her and his/her employers contributions to the plan after 2 years. It also means that all contributions are locked in after 2 years and cannot be cashed in for use by the employee in a low income year. Should the employee change jobs, these funds can only be transferred to the RPP of a new employer or the funds can be transferred to an individual RRSP (or any number of RRSPs) but in either scenario, the funds are locked in and cannot be accessed until at least age 60. The only choices available to access locked in RPP funds after age 60 are the conversion to a Life Income Fund or a Unisex Annuity.
An option is at-the-money if the strike price of the option is equal to the market price of the
A plan by U.S. Treasury Secretary James Baker under which 15 principal middle-income debtor
Gives the lessee the option to purchase the asset at a price below fair market
Also called the broker loan rate , the interest rate that banks charge brokers to finance
A transaction in which the purchaser's intention is to reduce or eliminate a short position in
Financial planning conducted by a firm that encompasses preparation of both
A pension plan in which the sponsor agrees to make specified dollar payments to
A pension plan in which the sponsor is responsible only for making specified
The purchase by investors of securities directly from the issuer.
Automatic reinvestment of shareholder dividends in more shares of a
A company contributes to a trust fund that buys stock on behalf of
A financial blueprint for the financial future of a firm.
The process of evaluating the investing and financing options available to a firm. It
Arrangement used to finance inventory. A finance company buys the inventory, which is then
money that moves across country borders in response to interest rate differences and that moves
Defined benefit pension plans that are guaranteed by life insurance products. Related: noninsured plans
A put option that has a strike price higher than the underlying futures price, or a call option
Long-term financial plan
Financial plan covering two or more years of future operations.
Materials requirement planning
Computer-based systems that plan backward from the production schedule
For mutual funds, the amount required to open a new account (Minimum Initial
Composed of currency and coins outside the banking system plus liabilities to the deposit money banks.
Money center banks
Banks that raise most of their funds from the domestic and international money markets, relying less on depositors for funds.
Related: Investment management.
Related: Investment manager.
money markets are for borrowing and lending money for three years or less. The securities in
Money market demand account
An account that pays interest based on short-term interest rates.
Money market fund
A mutual fund that invests only in short term securities, such as bankers' acceptances,
Money market hedge
The use of borrowing and lending transactions in foreign currencies to lock in the
Money market notes
Publicly traded issues that may be collateralized by mortgages and MBSs.
Money rate of return
Annual money return as a percentage of asset value.
M1-A: Currency plus demand deposits
In a Treasury auction, the amount by which the par value of the securities offered exceeds that of
Defined benefit pension plans that are not guaranteed by life insurance products. Related:
Open-market purchase operation
A systematic program of repurchasing shares of stock in market
A transaction in which the purchaser's intention is to create or increase a long position in
A call option is out-of-the-money if the strike price is greater than the market price
Overfunded pension plan
A pension plan that has a positive surplus (i.e., assets exceed liabilities).
A fund that is established for the payment of retirement benefits.
Plan for reorganization
A plan for reorganizing a firm during the Chapter 11 bankruptcy process.
The entities that establish pension plans, including private business entities acting for their
Planned amortization class CMO
1) One class of CMO that carries the most stable cash flows and the
Planned capital expenditure program
Capital expenditure program as outlined in the corporate financial plan.
Planned financing program
Program of short-term and long-term financing as outlined in the corporate
The length of time a model projects into the future.
Precautionary demand (for money)
The need to meet unexpected or extraordinary contingencies with a
To buy, to be long, to have an ownership position.
Method of accounting for a merger in which the acquirer is treated as having purchased
As used in connection with project financing, an agreement to purchase a specific
Purchase and sale
A method of securities distribution in which the securities firm purchases the securities
Resembles a sinking fund except that money is used only to purchase bonds if they are selling
Accounting for an acquisition using market value for the consolidation of the two entities'
An agreement with a commitment by the seller (dealer) to buy a security back from
Repurchase of stock
Device to pay cash to firm's shareholders that provides more preferable tax treatment
Program by which a corporation buys back its own shares in the open market. It is usually
Short-term financial plan
A financial plan that covers the coming fiscal year.
Speculative demand (for money)
The need for cash to take advantage of investment opportunities that may arise.
A firm's repurchase of outstanding shares of its common stock.
The firm buys back its own stock from a potential bidder, usually at a substantial
Tax-deferred retirement plans
Employer-sponsored and other plans that allow contributions and earnings to
Time value of money
The idea that a dollar today is worth more than a dollar in the future, because the dollar
Transaction demand (for money)
The need to accommodate a firm's expected cash transactions.
Underfunded pension plan
A pension plan that has a negative surplus (i.e., liabilities exceed assets).
The ability to establish automatic periodic mutual fund redemptions and have proceeds
Planning, programming and budgeting system (PPBS)
A method of budgeting in which budgets are allocated to projects or programmes rather than to responsibility centres.
A contra account that reduces purchases by the amount of the discounts taken for early payment.
A contra account that reduces purchases by the amount of items purchased that were subsequently returned.
Items purchased by the company for the purpose of resale.
A journal used to record the transactions that result in a credit to accounts payable.
property, plant, and equipment
This label is generally used in financial
A market that specializes in trading short-term, low-risk, very liquid
cafeteria plan a “menu” of fringe benefit options that include
cash or nontaxable benefits
Employee Stock Ownership Plan (ESOP)
a profit-sharing compensation program in which investments are made in
enterprise resource planning (ERP) system
a packaged software program that allows a company to
manufacturing resource planning (MRP II)
a fully integrated materials requirement planning system that involves
materials requirements planning (MRP)
a computerbased information system that simulates the ordering and
open purchase ordering
a process by which a single purchase
a formulation of the details of implementing
the process of creating the goals and objectives for
the process of developing a statement of
the process of determining the specific
Price actually paid for a security. Typically the purchase
Manufacturing resource planning (MRP II)
An expansion of the material requirements planning concept, with additional computer-based capabilities in the areas of
Material requirements planning (MRP)
A computer-driven production methodology
A formal agreement between an entity and its employees, whereby the
Property, plant, and equipment
This item is comprised of all types of fixed assets
An accounting method used to combine the financial statements of
Market for short-term financial assets.
Time horizon for a financial plan.
Firm buys back stock from its shareholders.
See money base.
Any item that serves as a medium of exchange, a store of value, and a unit of account. See medium of exchange.
Cash plus deposits of the commercial banks with the central bank.
A financial market in which short-term (maturity of less than a year) debt instruments such as bonds are traded.
Change in the money supply per change in the money base.
Money Rate of Interest
See interest rate, nominal.
Neutrality of Money
The doctrine that the money supply affects only the price level, with no long-run impact on real variables.
Plant and Equipment
Buildings and machines that firms use to produce output.
Sale of bonds by the government to the central bank.
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