Active Participation Status - Meaning & Definition
Published by MBA Skool Team, Last Updated: December 19, 2014
What is Active Participation Status?
Active Participation Status is an indication which provides us the information whether an employee of an organization has availed the employer’s retirement plans or not.
In general and especially in US, there are organizations which sponsors the retirement plans for their employees. It is not compulsory for the employees to avail this plan, I.e., they have a choice of participating in the plan. The employees, in most of the cases, participate in these plans because of the following reasons:
a. It helps individuals to earn and allocate a considerable amount for their retirement savings.
b. It provides tax advantages to the individuals who opt for the retirement plans.
Largely the organizations have the following plans to offer to their employees:
a. Individual Retirement Accounts (IRAs)
b. Qualified Annuity Plans
c. Employee Funded Pension Trusts
Among these IRAs are the most widely used plans by the organizations. An IRA is a form of a retirement plan, which constitutes of the individual’s retirement account and an individual retirement annuity, through which the individuals work out their plans with a life insurance company.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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