Plan Participant

DEFINITION of 'Plan Participant'

A plan participant either contributes into a pension plan or is in a position to receive benefit payments from the plan. It includes a retired person receiving distributions from a pension plan, or a beneficiary or dependent named by a contributing member.

BREAKING DOWN 'Plan Participant'

A plan participant has the right to receive benefit payments from a pension plan, whether it is a defined benefit or a defined contribution pension plan, as long as the requirements under the plan's contract has been fulfilled. Under most defined benefit pension plans, the member is required to complete a minimum number of years or service in order to qualify for their maximum pension allowable.

The tax law definition of an "active participant" to a company plan could include employees not participating in the employer's plan.

RELATED TERMS
  1. Unfunded Pension Plan

    An employer managed retirement plan that uses the employer's ...
  2. Fully Funded

    A pension plan that has sufficient assets needed to provide for ...
  3. Advanced Funded Pension Plan

    A pension plan that is funded concurrently with the employee's ...
  4. Pension Adjustment Reversal - PAR

    A numerical calculation in certain Canadian pension plans that ...
  5. Target-Benefit Plan

    A benefit plan that is similar to a defined benefit plan since ...
  6. Active Participant Status

    Active-participant status is a reference to an individual's participation ...
Related Articles
  1. Retirement

    Understanding Defined Benefit Pension Plans

    An employer-sponsored retirement plan where employee benefits are based on a formula using factors such as salary history and duration of employment.
  2. Retirement

    How Does a Pension Plan Work?

    A pension plan is a savings plan maintained by an employer on behalf of its employees for their retirement.
  3. Retirement

    7 Signs Your Pension Fund Is In Trouble

    Even if you're lucky enough to have a pension plan, you can't assume it'll pay out.
  4. Financial Advisors

    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.
  5. Retirement

    Pension Plans: Pain Or Pleasure?

    Employees have a love/hate relationship with this retirement option.
  6. Financial Advisors

    New 401(k) Pension Rollover Rule: Pros and Cons

    Is the new rule allowing participants to roll their 401(k) balances into pensions a good idea?
  7. Professionals

    Qualified Retirement Plans

    FINRA/NASAA Series 66: Section 4 Qualified Retirement Plans. This section discusses two types of qualified retirement plans, defined benefit and defined contribution plans.
  8. Financial Advisors

    How to Advise Clients with Frozen Pensions

    Financial advisors are on the front line in advising clients impacted by a frozen pension. Here's what they need to consider.
  9. Retirement

    How Safe Is Your Pension?

    A 2014 law permits some private pension plans to reduce benefits. How to figure out if your retirement income is endangered.
  10. Professionals

    Accounting For Long-Term Liabilities

    CFA Level 1 - Accounting For Long-Term Liabilities. Learn the components of various long-term liabilities and the rules governing their accounting treatments.
RELATED FAQS
  1. Who bears the investment risk in 401(k) plans?

    Who actually bears the investment risk in a pension plan depends on the type of pension plan that is employed. In a broad ... Read Answer >>
  2. How does a defined benefit pension plan differ from a defined contribution plan?

    Learn the differences between defined benefit plans and defined contribution plans when reviewing employer-sponsored qualified ... Read Answer >>
  3. What's the difference between a 401(k) and a pension plan?

    Discern the differences between 401(k) plans, in which employees assume the market risk, and pension plans, in which the ... Read Answer >>
  4. How do pay-as-you-go pension plans work?

    Learn what a pay-as-you-go pension plan is and how it is different from fully funded pension plans. Understand how public ... Read Answer >>
  5. How do Pay As You Go pension plans work?

    Learn how pay-as-you-go pension plans are different than fully funded pension plans and why some government plans are running ... Read Answer >>
  6. Are Canadian Pension Plans inflation-protected?

    Learn about the Canada Pension Plan and how it adjusts its contributions and benefits each year for changes in inflation ... Read Answer >>
Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  3. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  4. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  5. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  6. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
Trading Center