Integration or "permitted disparity" has been recognized as a legitimate and fair design tool in the preparation of qualified plans for more than 30 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 ($90,000 for 2005) can be 5.7% of such compensation if at least the same allocation is provided for each participant's total compensation. A defined benefit or target pension plan is integrated based on the benefit to be provided at normal retirement age. Generally compensation in excess of the taxable wage bases is allowed a benefit of 26.25% if at least the same benefit is provided for each participant's total compensation . This maximum percentage (26.25%) is reduced pro-rata for service with the employer less than 35 years. back to top