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February 16, 2009

Permitted disparity-Social security integration

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Definition

Method of computing and allocating nonelective contributions under an employer sponsored plan, where the allocation method results in participants, with compensation above the integration level receiving a higher percentage of contribution .

Referring Cite

  • IRC § 401(l)
  • Treas Reg § 1.401(l)-1 Permitted disparity in employer-provided contributions or benefits.
  • Treas Reg § 1.401(l)-2 Permitted disparity for defined contribution plans.
  • Treas Reg § 1.401(l)-3 Permitted disparity for defined benefit plans.
  • Treas Reg § 1.401(l)-5 Overall permitted disparity limits
  • Notice 89-70

Additional Helpful Information

  • Permitted disparity cannot be used for SIMPLE IRAs
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