Rev. Rul. 72-492

Advice has been requested whether the benefits provided by the pension plan described below are properly integrated with benefits provided under the Social Security Act.

An employer established an "offset" type of pension plan, as defined by section 2.07 of Revenue Ruling 71-446, C.B. 1971-2, 187. The plan provides for normal retirement benefits, other benefits not related to an employee's disability, and also benefits payable in the event of an employee's disability. The rate of offset to any employee's benefit upon retirement for any reason is equal to the maximum rate permitted by Revenue Ruling 71-446 in an otherwise similar plan which does not provide for any disability benefits.

According to the plan, if, before reaching age 65, an employee becomes disabled, as defined in the plan, and if the employee is eligible for and receives disability benefits under the Social Security Act for the period of time from his date of disability (after the waiting period required under the Social Security Act) continuously until age 65, such employee will receive a benefit commencing at age 65 and payable for life thereafter equal to the benefit that would have been payable if the employee remained in service until age 65 with the employer with no change in compensation after becoming disabled and before reaching age 65. Rules with respect to the determination of eligibility for disability benefits are uniformly and consistently applicable to all employees in similar circumstances, and no integrated disability benefits are payable before age 65.

Section 12.012 of Revenue Ruling 71-446 allows similar disability benefits under the same conditions, without any reduction in the otherwise applicable limit, in the case of an excess plan, as defined by section 2.06 of Revenue Ruling 71-446.

The same principle applies to an offset plan. Accordingly, it is held that the benefits provided by the plan in question are properly integrated with benefits provided under the Social Security Act.

Revenue Ruling 71-446 is hereby amplified.