Part I. Rulings — Internal Revenue Bulletin 2005-46

Section 401.—Qualified Pension, Profit-Sharing, and Stock Bonus Plans

26 CFR 1.401(l)–1: Permitted disparity in employer- provided contributions or benefits.

2006 covered compensation tables; permitted disparity. The covered compensation tables under section 401 of the Code for the year 2006 are provided for use in determining contributions to defined benefit plans and permitted disparity.

Rev. Rul. 2005–72

This revenue ruling provides tables of covered compensation under § 401(l)(5)(E) of the Internal Revenue Code (the “Code”) and the Income Tax Regulations, thereunder, for the 2006 plan year.

Section 401(l)(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(l)(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(l)–1(c)(34) defines the taxable wage base as the contribution and benefit base under section 230 of the Act.

Section 1.401(l)–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

2006 COVERED COMPENSATION TABLE

CALENDAR YEAR OF SOCIAL

SECURITY RETIREMENT AGE

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(l)–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(l)–1(c)(7)(i) is the taxable wage base in effect as of the beginning of the plan year.

Section 1.401(l)–1(c)(7)(ii) provides that, for purposes of determining the amount of an employee’s covered compensation under §1.401(l)–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 2006 year, the taxable wage base is $94,200.

The following tables provide covered compensation for 2006:

2006 COVERED COMPENSATION

TABLE II

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

2005–46 I.R.B. 944 November 14, 2005

2006 COVERED COMPENSATION

TABLE II

CALENDAR YEAR OF BIRTH

2006 COVERED COMPENSATION TABLE

CALENDAR YEAR OF SOCIAL

SECURITY RETIREMENT AGE

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 48,816 1941 2007 51,252 1942 2008 53,628 1943 2009 55,944 1944 2010 58,236 1945 2011 60,492 1946 2012 62,712 1947 2013 64,896 1948 2014 66,936 1949 2015 68,880 1950 2016 70,728 1951 2017 72,492 1952 2018 74,160 1953 2019 75,780 1954 2020 77,340 1955 2022 80,268 1956 2023 81,672 1957 2024 82,992 1958 2025 84,216 1959 2026 85,380 1960 2027 86,484 1961 2028 87,540 1962 2029 88,500 1963 2030 89,436 1964 2031 90,336 1965 2032 91,164 1966 2033 91,896 1967 2034 92,520 1968 2035 93,024 1969 2036 93,420 1970 2037 93,684 1971 2038 93,900 1972 2039 94,080 1973 and later 2040 94,200

November 14, 2005 945 2005–46 I.R.B.

2006 Rounded Covered Compensation Table

Year of Birth

Covered Compensation

1937 39,000 1938–1939 45,000 1940 48,000 1941 51,000 1942 54,000 1943–1944 57,000 1945 60,000 1946 63,000 1947–1948 66,000 1949 69,000 1950–1951 72,000 1952–1953 75,000 1954 78,000 1955–1956 81,000 1957–1959 84,000 1960–1961 87,000 1962–1965 90,000 1966–1969 93,000 1970 and later 94,200

Eastern time, Monday through Friday (a toll-free number). Mr. Isaacs’s telephone number is (202) 283–9710 (not a toll-free number).

Drafting Information

The principal author of this revenue ruling is Lawrence Isaacs of the Employee Plans, Tax Exempt and Government Enti

ties 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.

2005–46 I.R.B. 946 November 14, 2005