Social Security Integration Rate

[davef]

Has the SS integration rate for DC plans increased above 5.7%? I've had several people tell me it is 6.2%, which corresponds the the OASDI rate, not the OA rate called for in the Code. I'm assuming they are looking at the wrong rate, but thought I would first check with others.

[Tom Poje]

we are still at 5.7%. This question comes up every year. I forget the reason why we use 5.7 instead of the 6.2, but I guess that's another story.

[LCARUSI]

The maximum excess contribution percentage cannot exceed the lesser of

(1) and (2):

1)the base contribution percentage

2)the greater of 5.7% and the SS tax rate attributable to the old age portion of OASDI (the entire OASDI rate is 6.2%, the old age portion of OASDI is less than 5.7%==>5.7% is the maximum)

[david rigby]

The above limitation is contained in IRC 401(l) (subsection lowercase L).

I believe this section defines a "safe harbor". If you can pass a general test under the 401(a)(4) regs, then you can use some other integration formula.