Revenue Ruling 2004-104

Rev. Rul. 2004-104
Rev. Rul. 2004-104, 2004-46 I.R.B. 837
                       Internal Revenue Service (I.R.S.)
                                 Revenue Ruling
              2005 COVERED COMPENSATION TABLES; PERMITTED DISPARITY
                          Published: November 15, 2004

 Section 401.–Qualified Pension, Profit-Sharing, and Stock Bonus Plans, 26 CFR 1.401(l)-1: Permitted disparity in employer-provided contributions or benefits.

  2005 covered compensation tables; permitted disparity. The covered compensation tables under section 401 of the Code for the year 2005 are provided for use in determining contributions to defined benefit plans and permitted disparity.

  2005 covered compensation tables; permitted disparity. The covered compensation tables under section 401 of the Code for the year 2005 are provided for use in determining contributions to defined benefit plans and permitted disparity.

  This revenue ruling provides tables of covered compensation under s 401(1)(5)(E) of the Internal Revenue Code (the “Code”) and the Income Tax Regulations, thereunder, for the 2005 plan year.

  Section 401(1)(5)(E)(i) defines covered compensation with respect to an employee, as the average of the contribution and benefit bases in effect under section 230 of the Social Security Act (the “Act”) for each year in the 35-year period ending with the year in which the employee attains social security retirement age.

  Section 401(1)(5)(E)(ii) of the Code states that the determination for any year preceding the year in which the employee attains social security retirement age shall be made by assuming that there is no increase in covered compensation after the determination year and before the employee attains social security retirement age.

  Section 1.401(1)-1(c)(34) of the Income Tax Regulations defines the taxable wage base as the contribution and benefit base under section 230 of the Act.

  Section 1.401(1)-1(c)(7)(i) defines covered compensation for an employee as the average (without indexing) of the taxable wage bases in effect for each calendar year during the 35-year period ending with the last day of the calendar year in which the employee attains (or will attain) social security retirement age. A 35-year period is used for all individuals regardless of the year of birth of the individual. In determining an employee’s covered compensation for a plan year, the taxable wage base for all calendar years beginning after the first day of the plan year is assumed to be the same as the taxable wage base in effect as of the beginning of the plan year. An employee’s covered compensation for a plan year beginning after the 35-year period applicable under s 1.401(1)-1(c)(7)(i) is the employee’s covered compensation for a plan year during which the 35-year period ends. An employee’s covered compensation for a plan year beginning before the 35-year period applicable under s 1.401(1)-1(c)(7)(i) is the taxable wage base in effect as of the beginning of the plan year.

  Section 1.401(1)-1(c)(7)(ii) provides that, for purposes of determining the amount of an employee’s covered compensation under s 1.401(1)-1(c)(7)(i), a plan may use tables, provided by the Commissioner, that are developed by rounding the actual amounts of covered compensation for different years of birth.

  For purposes of determining covered compensation for the 2005 year, the taxable wage base is $90,000.

  The following tables provide covered compensation for 2005:
                        2005 COVERED COMPENSATION TABLE
CALENDAR YEAR OF BIRTH    CALENDAR YEAR OF SOCIAL     2005 COVERED COMPENSATION
                          SECURITY RETIREMENT AGE
         1907                       1972                                 $4,488
         1908                       1973                                  4,704
         1909                       1974                                  5,004
         1910                       1975                                  5,316
         1911                       1976                                  5,664
         1912                       1977                                  6,060
         1913                       1978                                  6,480
         1914                       1979                                  7,044
         1915                       1980                                  7,692
         1916                       1981                                  8,460
         1917                       1982                                  9,300
         1918                       1983                                 10,236
         1919                       1984                                 11,232
         1920                       1985                                 12,276
         1921                       1986                                 13,368
         1922                       1987                                 14,520
         1923                       1988                                 15,708
         1924                       1989                                 16,968
         1925                       1990                                 18,312
         1926                       1991                                 19,728
         1927                       1992                                 21,192
         1928                       1993                                 22,716
         1929                       1994                                 24,312
         1930                       1995                                 25,920
         1931                       1996                                 27,576
         1932                       1997                                 29,304
         1933                       1998                                 31,128
         1934                       1999                                 33,060
         1935                       2000                                 35,100
         1936                       2001                                 37,212
         1937                       2002                                 39,444
         1938                       2004                                 43,992
         1939                       2005                                 46,344
         1940                       2006                                 48,696
         1941                       2007                                 51,012
         1942                       2008                                 53,268
         1943                       2009                                 55,464
         1944                       2010                                 57,636
         1945                       2011                                 59,772
         1946                       2012                                 61,872
         1947                       2013                                 63,936
         1948                       2014                                 65,856
         1949                       2015                                 67,680
         1950                       2016                                 69,408
         1951                       2017                                 71,052
         1952                       2018                                 72,600
         1953                       2019                                 74,100
         1954                       2020                                 75,540
         1955                       2022                                 78,228
         1956                       2023                                 79,512
         1957                       2024                                 80,712
         1958                       2025                                 81,816
         1959                       2026                                 82,860
         1960                       2027                                 83,844
         1961                       2028                                 84,780
         1962                       2029                                 85,620
         1963                       2030                                 86,436
         1964                       2031                                 87,216
         1965                       2032                                 87,924
         1966                       2033                                 88,536
         1967                       2034                                 89,040
         1968                       2035                                 89,424
         1969                       2036                                 89,700
         1970                       2037                                 89,844
         1971                       2038                                 89,940
    1972 and later                  2039                                 90,000

 2005 Rounded Covered Compensation Table
   Year of Birth     Covered Compensation
1937                        39,000
1938 - 1939                 45,000
1940                        48,000
1941                        51,000
1942 - 1943                 54,000
1944                        57,000
1945                        60,000
1946-1947                   63,000
1948                        66,000
1949-1950                   69,000
1951-1952                   72,000
1953-1954                   75,000
1955                        78,000
1956-1958                   81,000
1959-1961                   84,000
1962 - 1965                 87,000
1966 and later              90,000

Drafting Information

  The principal author of this revenue ruling is Lawrence Isaacs of the Employee Plans, Tax Exempt and Government Entities Division. For further information regarding this revenue ruling, please contact the Employee Plans taxpayer assistance telephone service at 1-877-829-5500, between the hours of 8:00 a.m. and 6:30 p.m. Eastern time, Monday through Friday (a toll-free number). Mr. Isaacs’s number is (202) 283-9710 (not a toll-free number).

 Rev. Rul. 2004-104, 2004-46 I.R.B. 837

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November 15th, 2004 |