Integration
Qualified Retirement Plan
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Types of Plans

Integration or "permitted disparity" has been recognized as a legitimate and fair design tool in the preparation of qualified plans for more than 40 years. The concept is that Social Security Benefits which are partially paid by employers discriminates against those earning above the taxable wage base. As such, IRS permits benefits or contributions above the taxable wage base to be higher than benefits or contributions up to the taxable wage base. As usual, the rules are complex and it is not our intent to go into great detail in this Summary.

A defined contribution plan, other than Target Pension Plan, is integrated on the basis of each participant's compensation. Generally the amount of contribution allocation above the taxable wage base ($118,500 for 2016) can be 5.7% of such compensation if at least the same allocation is provided for each participant's total compensation.

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