Question:   Am I considered covered by an employer sponsored retirement plan for the year if I do not participate in the plan or if I did not work long enough to be vested?

Answer:   The answer to this question depends on the type of retirement plan.

Generally, if your employer's plan has a separate account for each employee, it is a defined contribution plan.

• If any amount was contributed or allocated by you or your employer to your account, you are considered covered.
• It does not matter if you have worked long enough to be vested in your benefits (other than your own contributions).

In the other type of plan, a defined benefit plan:

• The employer must make enough contributions (together with earnings) to provide the retirement benefit promised in the retirement plan.
• If you meet the minimum age and years of service requirements to participate in your employer's plan, you are considered covered.
• It does not matter if you are not vested in your benefits.

The Form W-2 (PDF) you receive from your employer has a box used to indicate whether you were covered for the year. The "Pension Plan" box should be checked if you were covered in a plan sponsored by the employer.