No. of Recommendations: 3
Small correction.

With defined contribution plans, an 'active participant' is one who receives into their own account in a given year, at least one of the following:

1. contributions are made to the employee's account, whether from salary deferral or employer contribution
2. receives allocations from reallocated plan forfeitures

Employees who do not meet one of the above will not be considered to be active participant for that year.

OTOH, employees who are eligible for a defined benefit plan but do not participate WILL be considered active plan participants

Take a look at p. 14 of Pub 590 at

or for a little more user friendly format, look at Investopedia's definitions at

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