Active Participant Status

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DEFINITION of 'Active Participant Status'

Active-participant status is a reference to an individual's participation in an employer sponsored retirement plan. The plans which qualify include:

1. Qualified plans, such as profit sharing plans, defined benefit plans, money purchase pension or target benefit plans and 401(k) plans
2. SEP IRAs
3. SIMPLE IRAs
4. 403(b) plans
5. Qualified annuity plans
6. Employee Funded Pension Trusts (created before June 25, 1959)
7. A plan established for its employees by the United States, by a State or political subdivision of the United States, or by an agency or instrumentality of the United States or any of its subdivisions

BREAKING DOWN 'Active Participant Status'

Typically, the employer will indicate on the individual's Form W-2 if the individual is an active participant by checking the 'Retirement Plan' box. Individuals should check with their employers to be sure.

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RELATED FAQS
  1. If I participate in my company’s SIMPLE IRA plan, can I also contribute to ...

    Because the SIMPLE IRA contribution limits are much lower than the 401(k) limits, it might at first seem unfair that you ... Read Full Answer >>
  2. Is a person an active participant in an employer-sponsored retirement plan if he ...

    Yes. An individual is considered an active participant even if his or her participation in the plan has been for only a ... Read Full Answer >>
  3. 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 Full Answer >>
  4. Can my IRA be used for college tuition?

    You can use your IRA to pay for college tuition even before you reach retirement age. In fact, your retirement savings can ... Read Full Answer >>
  5. Why are IRA, Roth IRAs and 401(k) contributions limited?

    Contributions to IRA, Roth IRA, 401(k) and other retirement savings plans are limited by the IRS to prevent the very wealthy ... Read Full Answer >>
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    With a few exceptions, early withdrawals from traditional or Roth IRAs generally incur a tax penalty equal to 10% of the ... Read Full Answer >>

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