Chartered Retirement Planning Counselor (CRPC) Practice Exam 2026 - Free CRPC Practice Questions and Study Guide

An individual is classified as an "active participant" in an employer-sponsored defined contribution plan primarily based on contributing to the plan, which includes both employee contributions and employer contributions as well as any forfeitures that may apply. This classification is significant because it affects an individual’s eligibility for tax deductions and other benefits associated with the plan.

While receiving investment earnings credited to an account may indicate some level of involvement, it does not alone define active participation since these earnings can accrue without any active contributions from the participant. Attending investment seminars, although beneficial, is also not a determining factor for status as an active participant. Likewise, while making additional voluntary contributions enhances a participant's account, the essential definition revolves around contributions made by both the employee and employer, as well as any administrative actions like forfeitures affecting those contributions. Thus, the definition of active participation hinges on the direct contributions to the defined contribution plan rather than peripheral activities or outcomes.