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������������������������ employee attains social security retire- after the first day of the plan year is

ment age. assumed to be the same as the taxable

�������������������������

Section 401(I)(5)(E)(ii) of the Code wage base in effect as of the beginning

���������������������� states that the determination for any of the plan year. An employee’s cov � year preceding the year in which the ered compensation for a plan year 26 CFR 1.401(l)–1: Permitted disparity in employee attains social security retire- beginning after the 35–year period employer–provided contributions or benefits. ment age shall be made by assuming applicable under § 1.401(I)-1(c)(7)(i) is

that there is no increase in covered the employee’s covered compensation

Covered compensation tables; 2002 . compensation after the determination for a plan year during which the 35– The covered compensation tables for year and before the employee attains year period ends. An employee’s covthe year 2002 under section 401 of the social security retirement age. ered compensation for a plan year Code are provided for use in determin- Section 1.401(I)-1(c)(34) of the beginning before the 35–year period ing contributions to defined benefit regulations defines the taxable wage applicable under § 1.401(I)-1(c)(7)(i) is plans and permitted disparity. base as the contribution and benefit the taxable wage base in effect as of the

base under section 230 of the Act. beginning of the plan year.

������������������ Section 1.401(I)-1(c)(7)(i) defines Section 1.401(I)-1(c)(7)(ii) provides

� covered compensation for an employee that, for purposes of determining the

as the average (without indexing) of amount of an employee’s covered

This revenue ruling provides tables

the taxable wage bases in effect for compensation under §

of covered compensation under

each calendar year during the 35–year 1(c)(7)(i), a plan may use tables, pro § 401(I)(5)(E) of the Internal Revenue

period ending with the last day of the vided by the Commissioner, that are

Code (the “Code”) and the Income Tax

calendar year in which the employee developed by rounding the actual

Regulations, thereunder, for the 2002

attains (or will attain) social security amounts of covered compensation for

plan year.

retirement age. A 35–year period is different years of birth.

Section 401(I)(5)(E)(i) defines cov used for all individuals regardless of the For purposes of determining covered

ered compensation with respect to an

year of birth of the individual. In deter- compensation for the 2002 year the

employee, as the average of the contri mining an employee’s covered taxable wage base is $84,900.

bution and benefit bases in effect under

compensation for a plan year, the The following tables provide covered

section 230 of the Social Security Act

taxable wage base for all calendar years compensation for 2002:

(the “Act”) for each year in the 35–year

beginning

period ending with the year in which the

employee attains social security retirement age. Section 401(I)(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(I)-1(c)(34) of the regulations defines the taxable wage base as the contribution and benefit base under section 230 of the Act. Section 1.401(I)-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 § 1.401(I)-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 § 1.401(I)-1(c)(7)(i) is the taxable wage base in effect as of the beginning of the plan year. Section 1.401(I)-1(c)(7)(ii) provides that, for purposes of determining the amount of an employee’s covered compensation under § 1.401(I)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 2002 year the taxable wage base is $84,900. The following tables provide covered compensation for 2002:

2002 COVERED COMPENSATION TABLE

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2002 COVERED COMPENSATION TABLE

CALENDAR CALENDAR YEAR OF 2002 COVERED YEAR OF SOCIAL SECURITY COMPENSATION BIRTH RETIREMENT AGE TABLE

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2002 COVERED COMPENSATION TABLE

CALENDAR CALENDAR YEAR OF 2002 COVERED YEAR OF SOCIAL SECURITY COMPENSATION BIRTH RETIREMENT AGE TABLE

1963 2030 82,500 1964 2031 83,136 1965 2032 83,700 1966 2033 84,168 1967 2034 84,516 1968 2035 84,768 1969 or later 2036 84,900

2002 ROUNDED COVERED COMPENSATION TABLE

COVERED YEAR OF BIRTH COMPENSATION

1935–1936 $36,000 1937 39,000 1938 – 1939 45,000 1940 48,000 1941 51,000 1942 – 1943 54,000 1944 57,000 1945 – 1946 60,000 1947 – 1948 63,000 1949 66,000 1950 – 1952 69,000 1953 – 1954 72,000 1955 75,000 1956 – 1958 78,000 1959 – 1962 81,000 1963 – 1966 84,000 1967 and later 84,900

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DRAFTING INFORMATION

The principal author of this revenue ruling is Todd Newman of Employee Plans Actuarial Group 1 of the 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 9:30 p.m. Eastern time, Monday through Friday (a toll–free number). Mr. Newman’s number is (202) 283-9888 (not a toll free number).

� ������������������������� ��������������������� ��������

2001 base period T-bill rate . The “base period T-bill rate” for the period ending September 30, 2001, is published as required by section 995(f) of the Code.

������������������

Section 995(f)(1) of the Internal Revenue Code provides that a shareholder of a DISC shall pay interest each taxable year in an amount equal to the product of the shareholder’s DISCrelated deferred tax liability for the year and the “base period T-bill rate.” Under section 995(f)(4), the base period T-bill rate is the annual rate of interest determined by the Secretary to be equivalent to the average of the 1-year constant maturity Treasury yields, as published by the Board of Governors of the Federal Reserve System, for the 1-year period ending on September 30 of the calendar year ending with (or of the most recent calendar year ending before) the close of the taxable year of the shareholder. The base period T-bill rate for the period ending September 30, 2001, is 4.41 percent. Pursuant to section 6222 of the Code, interest must be compounded daily. The table below provides factors for compounding the base period T-bill rate daily for any number of days in the shareholder’s taxable year (including a

52-53 week accounting period) for the 2001 base period T-bill rate. To compute the amount of the interest charge for the shareholder’s taxable year, multiply the amount of the shareholder’s DISC-related deferred tax liability (as defined in section 995(f)(2)) for that year by the base period T-bill rate factor corresponding to the number of days in the shareholder’s taxable year for which the interest charge is being computed. Generally, one would use the factor for 365 days. One would use a different factor only if the shareholder’s taxable year for which the interest charge being determined is a short taxable year, if the shareholder uses the 52–53 week taxable year, or if the shareholder’s taxable year is a leap year. For the base period T-bill rates for the periods ending in prior years, see Rev. Rul. 2000–52 (2000-48 I.R.B. 516).

DRAFTING INFORMATION

The principal author of this revenue ruling is David Bergkuist of the Office of the Associate Chief Counsel (International). For further information about this revenue ruling, contact Mr. Bergkuist at (202) 622-3850 (not a toll– free call).

2001 ANNUAL RATE COMPOUNDED DAILY 4.410 PERCENT DAYS FACTOR

1 .000120822 2 .000241658 3 .000362510 4 .000483375 5 .000604256

6 .000725151 7 .000846060 8 .000966984 9 .001087923 10 .001208876

11 .001329844 12 .001450827 13 .001571824 14 .001692836 15 .001813862

4.410 PERCENT DAYS FACTOR

16 .001934903 17 .002055959 18 .002177029 19 .002298114 20 .002419214

21 .002540328 22 .002661457 23 .002782601 24 .002903759 25 .003024931

26 .003146119 27 .003267321 28 .003388538 29 .003509769 30 .003631015

31 .003752275 32 .003873551 33 .003994841 34 .004116145 35 .004237464

36 .004358798 37 .004480147 38 .004601510 39 .004722888 40 .004844281

41 .004965688 42 .005087110 43 .005208546 44 .005329997 45 .005451463

46 .005572944 47 .005694439 48 .005815949 49 .005937474 50 .006059013

51 .006180567 52 .006302136 53 .006423719 54 .006545317 55 .006666930

56 .006788557 57 .006910199 58 .007031856 59 .007153528 60 .007275214

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2001 ANNUAL RATE COMPOUNDED DAILY—CONTINUED

4.410 PERCENT DAYS FACTOR

141 .017180782 142 .017303680 143 .017426592 144 .017549520 145 .017672462

146 .017795419 147 .017918391 148 .018041378 149 .018164380 150 .018287396

151 .018410428 152 .018533474 153 .018656535 154 .018779611 155 .018902702

156 .019025808 157 .019148929 158 .019272064 159 .019395215 160 .019518380

161 .019641560 162 .019764755 163 .019887965 164 .020011190 165 .020134429

166 .020257684 167 .020380954 168 .020504238 169 .020627537 170 .020750851

171 .020874180 172 .020997524 173 .021120883 174 .021244257 175 .021367646

176 .021491049 177 .021614468 178 .021737901 179 .021861350 180 .021984813

4.410 PERCENT DAYS FACTOR

61 .007396915 62 .007518630 63 .007640361 64 .007762106 65 .007883866

66 .008005640 67 .008127429 68 .008249233 69 .008371052 70 .008492885

71 .008614733 72 .008736596 73 .008858473 74 .008980366 75 .009102272

76 .009224194 77 .009346131 78 .009468082 79 .009590048 80 .009712028

81 .009834023 82 .009956034 83 .010078058 84 .010200098 85 .010322152

86 .010444221 87 .010566305 88 .010688404 89 .010810517 90 .010932645

91 .011054788 92 .011176945 93 .011299118 94 .011421305 95 .011543507

96 .011665723 97 .011787955 98 .011910201 99 .012032462 100 .012154738

4.410 PERCENT DAYS FACTOR

101 .012277028 102 .012399333 103 .012521653 104 .012643988 105 .012766338

106 .012888702 107 .013011081 108 .013133475 109 .013255884 110 .013378307

111 .013500746 112 .013623199 113 .013745667 114 .013868149 115 .013990647

116 .014113159 117 .014235686 118 .014358228 119 .014480785 120 .014603356

121 .014725943 122 .014848544 123 .014971160 124 .015093791 125 .015216436

126 .015339097 127 .015461772 128 .015584462 129 .015707167 130 .015829886

131 .015952621 132 .016075370 133 .016198134 134 .016320913 135 .016443707

136 .016566516 137 .016689340 138 .016812178 139 .016935031 140 .017057899

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2001 ANNUAL RATE COMPOUNDED DAILY—CONTINUED

4.410 PERCENT DAYS FACTOR

261 .032035036 262 .032159728 263 .032284436 264 .032409158 265 .032533896

266 .032658648 267 .032783416 268 .032908199 269 .033032997 270 .033157810

271 .033282638 272 .033407481 273 .033532340 274 .033657213 275 .033782102

276 .033907005 277 .034031924 278 .034156857 279 .034281806 280 .034406770

281 .034531749 282 .034656743 283 .034781752 284 .034906777 285 .035031816

286 .035156871 287 .035281940 288 .035407025 289 .035532125 290 .035657240

291 .035782370 292 .035907515 293 .036032676 294 .036157851 295 .036283042

296 .036408247 297 .036533468 298 .036658704 299 .036783955 300 .036909221

4.410 PERCENT DAYS FACTOR

181 .022108291 182 .022231784 183 .022355292 184 .022478815 185 .022602353

186 .022725906 187 .022849473 188 .022973056 189 .023096654 190 .023220266

191 .023343894 192 .023467536 193 .023591193 194 .023714865 195 .023838553

196 .023962255 197 .024085972 198 .024209704 199 .024333451 200 .024457213

201 .024580990 202 .024704782 203 .024828588 204 .024952410 205 .025076247

206 .025200099 207 .025323965 208 .025447847 209 .025571743 210 .025695655

211 .025819581 212 .025943523 213 .026067479 214 .026191451 215 .026315437

216 .026439439 217 .026563455 218 .026687486 219 .026811533 220 .026935594

4.410 PERCENT DAYS FACTOR

221 .027059670 222 .027183762 223 .027307868 224 .027431989 225 .027556126

226 .027680277 227 .027804443 228 .027928625 229 .028052821 230 .028177032

231 .028301258 232 .028425500 233 .028549756 234 .028674027 235 .028798314

236 .028922615 237 .029046932 238 .029171263 239 .029295610 240 .029419971

241 .029544347 242 .029668739 243 .029793146 244 .029917567 245 .030042004

246 .030166455 247 .030290922 248 .030415404 249 .030539901 250 .030664412

251 .030788939 252 .030913481 253 .031038038 254 .031162610 255 .031287197

256 .031411799 257 .031536416 258 .031661049 259 .031785696 260 .031910358

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2001 ANNUAL RATE COMPOUNDED DAILY—CONTINUED

4.410 PERCENT 4.410 PERCENT DAYS FACTOR DAYS FACTOR

301 .037034503 326 .040171461 302 .037159799 327 .040297137 303 .037285111 328 .040422827 304 .037410438 329 .040548533 305 .037535780 330 .040674254

306 .037661137 331 .040799990 307 .037786509 332 .040925742 308 .037911896 333 .041051509 309 .038037299 334 .041177290 310 .038162716 335 .041303087

311 .038288149 336 .041428900 312 .038413597 337 .041554727 313 .038539060 338 .041680570 314 .038664539 339 .041806428 315 .038790032 340 .041932301

316 .038915541 341 .042058189 317 .039041064 342 .042184092 318 .039166603 343 .042310011 319 .039292157 344 .042435945 320 .039417727 345 .042561894

321 .039543311 346 .042687858 322 .039668911 347 .042813838 323 .039794526 348 .042939833 324 .039920156 349 .043065843 325 .040045801 350 .043191868

4.410 PERCENT DAYS FACTOR

326 .040171461 327 .040297137 328 .040422827 329 .040548533 330 .040674254

331 .040799990 332 .040925742 333 .041051509 334 .041177290 335 .041303087

336 .041428900 337 .041554727 338 .041680570 339 .041806428 340 .041932301

341 .042058189 342 .042184092 343 .042310011 344 .042435945 345 .042561894

346 .042687858 347 .042813838 348 .042939833 349 .043065843 350 .043191868

4.410 PERCENT DAYS FACTOR

351 .043317908 352 .043443964 353 .043570035 354 .043696121 355 .043822222

356 .043948339 357 .044074471 358 .044200618 359 .044326780 360 .044452958

361 .044579151 362 .044705359 363 .044831582 364 .044957821 365 .045084074

366 .045210343 367 .045336628 368 .045462927 369 .045589242 370 .045715572

371 .045841918

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