W2's

[lsmith]

An employer who offers a retirement plan will sometimes automatically check the pension box on the W2. However, checking this box indicates that the employee is an active
participate in the plan although no amounts nor codes are entered in box 13. This W2 is
incorrect if the employee is a non participant and limits his contributions to his personal
IRA. Do any of you have a problem getting corrected W2s from employers or how do you handle this?

[Bird Legs]

W-2

My opinion on this is that the employee is a participant. The employee voluntarily declined to participate. It is still offered to him and as long as it is offered he is still
a participant.

[lsmith]

W2's

The checkbox rules for the pension plan indicates "check this box if the employee was an action participant (for any part of the year)". This leads me to believe that if they are not active participants, the box is not checked.

[jainen]

the instructions

According to the instructions for Form W-2, an "active participant" is not someone who participates actively, but someone who is eligible to participate.

[lsmith]

W2's

These rules can be confusing overall but if looked at by the type, fairly specific. I.E.,
rules for 401(k) and 403(b) indicate that if you make contributions, you are an active
participant. However, if you do not make a contribution, you are not.

Defined -Benefit plan. If you are eligble to participate in a defined-benefit plan for the
tax year, you are considered an active participant for that year. This is so even if you decline to participate...etc..etc

Most that I have encountered fall into the 401(k) or 403(b).

[oceanlovin'ea]

Very interesting

That is very enlightening to me. Sometimes W-2's show have the box checked even though no contribution is made and I have wondered why it would be checked with no contributions.

So we should really ask more questions if they want to put money into an IRA and the box is checked to determine what kind of plan is available to them at work and if they declined to contribute.

Linda F

[JON]

Rule the same

if during 2005 you received a contribution to a retirement plan-you are part of the plan. If you are a participant for one day-I believe also means you had to have received a contribution for that one day....

[BP.]

According to W-2 inst

According to W-2 instructions, if the plan is Defined Benefit, the box is checked if employee was eligible to participate. If the plan is Defined Contribution (eg. 401k), the box is checked only if employee or employer contributions were actually made.

[jainen]

That's right

That's right. My earlier post was wrong.

[Bees Knees]

Even with a 401(k) plan where the employee does not elect to defer any contributions, sometimes the employer makes contributions under a 5 year vesting arrangement. The employee may not even know there are amounts going into a fund that in 5 years becomes part of the employees account.

In this case where the employee has not yet had any amounts vested, the employee would be considered an "active" participant. Nothing on the W-2 would show up other than the retirement plan check box.