davef Posted January 27, 1999 Posted January 27, 1999 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 Posted January 28, 1999 Posted January 28, 1999 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 Posted January 28, 1999 Posted January 28, 1999 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 Posted January 30, 1999 Posted January 30, 1999 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. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
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