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  3. Active Participation Status

Active Participation Status

This article covers meaning & overview of Active Participation Status from HRM perspective.

Published by MBA Skool Team in Human Resources Terms Last Updated: March 11, 2023Read time:

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 which comprises of MBA students, management professionals, and industry experts. 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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