Internal Revenue Service
Revenue Ruling
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smRev. Rul. 78-92
1978-1 C.B. 118
Section 401 -- Pension Plans
Caution: Obsoleted by Rev. Rul. 93-87
IRS Headnote
Integration with social security; guidelines. Application of Rev. Rul. 71-446, which provides guidelines for determining whether retirement plans properly integrate with benefits provided by social security, is clarified to reflect changes enacted by the Social Security Amendments of 1977; Rev. Rul. 71-446 clarified.
Full Text
Rev. Rul. 78-92
Section 1. Purpose.
The purpose of this Revenue Ruling is to clarify the application of Rev. Rul. 71-446, 1971-2 C.B. 187, since the changes made by the Social Security Amendments of 1977 (Public Law No. 95-216, page 462, this Bulletin). Rev. Rul. 71-446 provides guidelines for determining whether the benefits or contributions of a plan integrate properly with the benefits or contributions under social security.
Sec. 2. Social Security Amendments.
The Social Security Amendments of 1977 revised the old law, under which the taxable wage base was determined automatically each calendar year by increasing the old base in proportion to the increase in average wages, by specifically designating the taxable wage bases for 1978 ($17,700), 1979 ($22,900), 1980 ($25,900), and 1981 ($29,700).
Sec. 3. Covered Compensation.
Section 3.02 of Rev. Rul. 71-446 provides tables of covered compensation which are based on the taxable wage bases under the Social Security Act. The ruling states that:
"(a)fter the enactment of any amendment to the Social Security Act affecting any employee's covered compensation, a plan may be amended to provide that the covered compensation of each employee whose benefits have not yet commenced shall be determined on the basis of the Social Security Act as so amended."
For purposes of determining covered compensation in an integrated plan, each increase in the taxable wage base designated for 1978 through 1981 will be considered to be enacted as of January 1 in the calendar year for which the base applies.
Thus, the covered compensation for any participant who separates from service in 1978 shall be determined without regard to any increases in the taxable wage base above the $17,700 taxable wage base in 1978.
Below are Tables I and II which replace Tables I and II in section 3.02 of Rev. Rul. 71-446 for 1978.
Covered Compensation 1978
Table I
Calendar Year of
65th Birthday Amount
1978 $ 8,400
1979-1980 9,000
1981 9,600
1982-1983 10,200
1984-1986 10,800
1987-1988 11,400
1989-1992 12,000
1993-1994 12,600
1995-1996 13,200
1997-1998 13,800
1999 14,400
2000-2001 15,000
2002-2003 15,600
2004-2005 16,200
2006-2007 16,800
2008-2012 17,400
2013 and later 17,700
Covered Compensation 1978
Table II
Calendar Year of
65th Birthday Amount
1978 $ 8,256
1979 8,724
1980 9,156
1981 9,540
1982 9,900
1983 10,224
1984 10,524
1985 10,800
1986 11,052
1987 11,292
1988 11,508
1989 11,712
1990 $11,904
1991 12,084
1992 12,252
1993 12,420
1994 12,564
1995 12,936
1996 13,308
1997 13,680
1998 14,040
1999 14,412
2000 14,784
2001 15,144
2002 15,468
2003 15,780
2004 16,068
2005 16,344
2006 16,632
2007 16,920
2008 17,160
2009 17,364
2010 17,484
2011 17,592
2012 17,664
2013 and later 17,700
Sec. 4. Benefits Under Offset Plans.
Section 11.01 of Rev. Rul. 71-446 provides two options for computing the allowable offset to a benefit for a participant separating from service before age 65, one of which assumes that the participant:
". . . will continue to receive until reaching age 65 compensation which would be treated as wages for purposes of the Social Security Act at the same rate as he received such compensation at the time of retirement or severance. . ."
For purposes of determining the offset in any integrated plan, each increase in the taxable wage base designated for 1978 through 1981 will be considered to be enacted as of the first day of the calendar year for which such taxable wage base applies.
Thus the offset for any participant who separates from service in 1978 shall be determined without regard to any increases in the taxable wage base above the $17,700 taxable wage base in 1978.
Rev. Rul. 71-446 is clarified.