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. What are my main rights as a 401(k) plan participant?

    Learn how under ERISA, 401(k) plan participants are guaranteed several important rights, including protections of their plan ... Read Answer >>
  3. What is the best retirement plan option for a physician with her own practice, employees ...

    It is very unlikely that you will find a qualified plan or an IRA-based plan that will allow the employer to exclude other ... Read Answer >>
  4. If I pass away, will my retirement plan go to my spouse tax free?

    If your spouse is the designated beneficiary of your retirement plan, the assets will pass to him or her tax free. The general ... Read Answer >>
  5. If a company undergoes an acquisition can an employee withdraw 401(k) funds tax free?

    Although the participant may be eligible to withdraw the funds if a plan is terminated as a result of an acquisition or other ... Read Answer >>
  6. 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 >>
Related Articles
  1. Financial Advisor

    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.
  2. 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.
  3. Markets

    Explaining the Participation Rate

    The participation rate is the percentage of civilians who are either employed or unemployed and looking for a job.
  4. Managing Wealth

    How to Piece Together a 401(k) Plan

    In the world of 401(k) investment lineups, more is not always better. Here's an overview of things you may want to include on your retirement plan. Or not.
  5. Financial Advisor

    Are Cash Balance Pensions the Best for Small Biz?

    Are cash balance pensions the right solution for your small business clients? Here's why they may or may not work for your firm.
  6. Retirement

    5 Steps to a Retirement Plan

    These considerations will help you make a realistic and thorough retirement plan.
  7. Retirement

    401(k) Lawsuits: How Employers Are Protecting Themselves

    Some companies are making it harder for employees to sue over retirement fund problems. Here is what you need to know about the trend.
  8. Retirement

    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.
  9. 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.
  10. Retirement

    Is Your 401(k) Being Mismanaged?

    401(k) plans managed by the wrong people can be hazardous to your future!
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. Activity Cost Driver

    A factor that influences or contributes to the expense of certain ...
Hot Definitions
  1. Put Option

    An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security ...
  2. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  3. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  4. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  5. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  6. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
Trading Center