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. Pension Adjustment Reversal - PAR

    A numerical calculation in certain Canadian pension plans that ...
  2. Past Service

    Service to an employer that is recognized for the defined benefit ...
  3. Pension Protection Act Of 2006 ...

    An act of legislation that makes a large number of reforms to ...
  4. Target-Benefit Plan

    A benefit plan that is similar to a defined benefit plan since ...
  5. Guaranteed Minimum Pension - GMP

    Pensions earned while working in the United Kingdom's public ...
  6. Cash Balance Pension Plan

    A pension plan under which an employer credits a participant's ...
Related Articles
  1. 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.
  2. Retirement

    America's Frozen Pension Dilemma

    Unfortunately, there are several factors that have eroded the presence of pension plans in America, and workers need to be prepared to replace that expected income for their retirement years. ...
  3. Retirement

    Are Cash Balance Pensions the Best for Small Biz?

    Are cash balance pensions the right solution for your small business clients?
  4. Financial Advisor

    Understanding Rules on Defined Benefit Pension Plans

    Defined benefit plans offer advantages to both employers and employees. Employers must understand the federal tax rules when establishing these plans.
  5. Retirement

    Chipping Away At The Pension Freeze Trend

    Learn five steps that'll put your retirement back into your own hands.
  6. Retirement

    How to Spot Pension Fraud Before It Hurts You

    Don't let pension fraud threaten your livelihood after retirement. Here's what to watch out for.
  7. Retirement

    A Primer On Defined-Benefit Pension Plans

    Most of us will rely on a pension plan in the future, so it's best to know the details of the various plans before signing up.
  8. Retirement

    Here’s How to Find a Lost Pension

    To find a lost pension, you have to figure out who is now responsible for paying it and how to claim your benefits.
  9. Retirement

    Can You Count On Your Pension?

    We look at how to determine the health of your company's pension plan, and what to do if things are looking grim.
  10. Financial Advisor

    How Capital Gains Tax Works on Pension Funds

    Here's why capital gains tax does not affect the assets in pension funds.
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 >>
Hot Definitions
  1. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
  2. Financial Industry Regulatory Authority - FINRA

    A regulatory body created after the merger of the National Association of Securities Dealers and the New York Stock Exchange's ...
  3. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs are often issued by companies seeking the capital to expand ...
  4. Cost of Goods Sold - COGS

    Cost of goods sold (COGS) is the direct costs attributable to the production of the goods sold in a company.
  5. Profit and Loss Statement (P&L)

    A financial statement that summarizes the revenues, costs and expenses incurred during a specified period of time, usually ...
  6. Monte Carlo Simulation

    Monte Carlo simulations are used to model the probability of different outcomes in a process that cannot easily be predicted ...
Trading Center