A money purchase pension scheme is one in which both the employer and the employee make regular contributions usually as a percentage of salary. The scheme can be set up under a trust as a Defined Contribution Scheme or more frequently as a Personal Pension Plan which belongs to the employee but to which the employer is making contributions.
A fund is accumulated over the years. The size of the fund depends upon the level of contributions and the investment return. There is no guarantee of the amount of the fund at retirement date. The employer is making a contribution but makes no promises of future benefits. The risk of the return is carried by the employee.