A:

Yes. An individual is considered an active participant even if his or her participation in the plan has been for only a short period.



It is the actual credit to the retirement plan that results in the active status, not necessarily the duration of the participation.



(For more, read Are You an Active Participant?)



This question was answered by Denise Appleby.



RELATED FAQS
  1. Does participation in a 401(k) plan prevent an individual from contributing to a ...

    No. An individual's participation in an employer-sponsored plan (including a 401(k) plan) does not affect his or her ability ... Read Answer >>
  2. How can I get information about my deceased husband's retirement account if his employer ...

    That is unusual. Contact his employer again and if you are not satisfied with the response, ask to speak with a supervisor ... Read Answer >>
  3. What kinds of investments are allowed in a qualified retirement plan, and what kinds ...

    Generally, the permissible investments for qualified plans include publicly-traded securities, real estate, mutual funds ... Read Answer >>
  4. I'm a teacher. Which is better for me, a 401(k) or 403(b)? What is the difference? ...

    The first step is to check with your employer regarding any retirement plan(s) it provides for employees, as you can only ... Read Answer >>
  5. Is a Canadian resident allowed to participate in a direct stock purchase plan from ...

    There is no law that prevents Canadians from participating in direct stock purchase plans offered by U.S. companies. There ... Read Answer >>
  6. I want to roll over a portion of my retirement plan with my employer and I have been ...

    This is based on the rules that an individual can roll over a portion of his or her retirement plan balance, rather than ... Read Answer >>
Related Articles
  1. Taxes

    Can You Deduct Your IRA Contributions?

    We help you answer this important question, which is determined by whether you are considered an "active participant".
  2. Products and Investments

    Top 401(k) Shortcomings: What to Know

    Many 401(k) plans are riddled with flaws that can impede retirement savers in many ways. Here are ten of the most common imperfections.
  3. Retirement

    401(k) Rollovers: The Tax Implications

    The tax rules for 401(k) rollovers can be simple or more complex, depending on which path you take.
  4. Options & Futures

    401(k): An Accidental Solution To The Retirement Problem

    The 401(k) is often a poor substitute for the defined-benefit plans it replaced, but there are steps you can take to make yours better.
  5. Savings

    3 Common Excuses For Not Contributing To A Retirement Plan

    If you're not participating in your employer-sponsored retirement plan, there may be some easy solutions.
  6. Retirement

    Retirement Savings for Small-Business Employees

    President Obama’s new budget gives high priority to improving retirement plans, especially for employees of small companies.
  7. Options & Futures

    Target Strategies Often Miss The Mark

    Before jumping into a tailor-made asset allocation plan, do the research - it will add years to your financial health.
  8. Retirement

    Do You Have a Crummy 401(k)?

    High-cost, outdated plans can keep your retirement portfolio from thriving. Here's what to do – and the 2015 Supreme Court case that could help.
  9. Retirement

    Traditional IRA Deductibility Limits

    Find out whether you can take a tax deduction on the contributions you make.
  10. Entrepreneurship

    Business Owners: A Guide To Qualified Retirement Plan Loans

    Thinking of adding a loan feature to your company's plan? Here's what you need to know.
RELATED TERMS
  1. Participation Rate

    A measure of the active portion of an economy's labor force. ...
  2. Active Participant Status

    Active-participant status is a reference to an individual's participation ...
  3. Plan Participant

    A plan participant either contributes into a pension plan or ...
  4. Passive Activity

    Activity in which the taxpayer did not materially participate ...
  5. Material Participation Test

    A set of criteria that determines whether a taxpayer is a material ...
  6. Involuntary Cash-Out

    Distributing the balance of a participant's retirement account ...
Trading Center