Elective Deferral Contribution
Definition Elective deferral contributions, also known as salary deferral contributions made to SIMPLE IRAs, 401(k) plans, SARSEPs, 403(b) plans . A participant may defer up
March 6, 2009
Are there any exceptions that would allow me to receive plan benefits and not considered an active participant?
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Are there any exceptions that would allow me to receive plan benefits and not considered an active participant?
Question
Are there any exceptions that would allow me to receive plan benefits and not be considered an active participant?
Answer
Yes. You are not treated as an active participant for any taxable year because of the following:
• You are covered under social security or railroad retirement
• You receive retirement benefits from a previous employer’s plan
• The only reason you participate in a plan is because you are a member of a reserve unit of the armed forces and both of the following conditions are met.
o The plan you participate in is established for its employees by:
1. The United States,
2. A state or political subdivision of a state, or
3. An instrumentality of either (a) or (b) above.
• You did not serve more than 90 days on active duty during the year (not counting duty for training).
• The only reason you participate in a plan is because you are a volunteer firefighter, and both of the following conditions are met.
o The plan you participate in is established for its employees by:
1. The United States,
2. A state or political subdivision of a state, or
3. An instrumentality of either (a) or (b) above.
o Your accrued retirement benefits at the beginning of the year will not provide more than $1,800 per year at retirement, (when expressed as a single life annuity commencing at age 65).
