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Are there any exceptions that would allow me to receive plan benefits and not considered an active participant?

Last Updated April 2, 2009

Question: 

Are there any exceptions that would allow me to receive plan benefits and not 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 a 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.
    • 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.
    • 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.
 
    • 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).