Rev. Rul. 69-5

Section 1. Introduction

This Revenue Ruling provides guides for the integration of disability benefits provided under an integrated pension or annuity plan with disability benefits provided under the Social Security Act. Disability benefits provided under such a plan are integrated only if the amount of such benefits or the offset to such benefits does not exceed the applicable limitation of section 2, and the plan satisfies the applicable requirements of section 3 regarding eligibility.

Sec. 2. Limitation on Disability Benefits

.01 Disability benefits payable for life. Disability benefits payable for life or until recovery from disability before normal retirement age are integrated:

1 Excess plans. In the case of any excess plan (as defined in section 2.06 of Rev. Rul. 69-4), if the amount of such benefits does not exceed the maximum allowable benefit which could be paid as a normal retirement benefit if the employee remained in service until normal retirement age, multiplied by the greater of 7/10 or the fraction described in section 10.01 of Revenue Ruling 69-4.

2 Certain unit-benefit excess plans. In the case of a unit-benefit excess plan (other than a plan described in section 6.05 of Rev. Rul. 69-4), if the amount of such benefits does not exceed the greater of the amount determined under section 2.011, or the retirement benefits (without actuarial reduction for payment before normal retirement age) accrued under such plan to the time of the employee's retirement for disability.

3 Offset plans. In the case of an offset plan (as defined in section 2.07 of Rev. Rul. 69-4), if the amount of the offset to such benefit does not exceed 64 percent of the employee's actual disability benefit under the Social Security Act as in effect at the time of his retirement for disability, except that after the employee reaches normal retirement age, the amount of the offset may be determined in accordance with section 7 of Revenue Ruling 69-4.

.02 Disability benefits payable only after normal retirement age. Disability benefits payable only after normal retirement age under an integrated excess plan which does not provide any disability benefits involving integration before normal retirement age are integrated if the amount of such benefits does not exceed the maximum allowable benefit which could be paid as a normal annual retirement benefit if the employee remained in service until normal retirement age.

.03 Minimum benefits and rounding of benefits. Minimum disability benefits and benefits rounded to a multiple of $10 a month may be provided in accordance with section 18 of Revenue Ruling 69-4.

Sec. 3. Eligibility Conditions

.01 Excess plans. Disability benefits provided under an excess plan are integrated only if the plan provides that such benefits are payable only where an employee satisfies eligibility conditions which meet the requirements of Part 5(m) of Revenue Ruling 65-178, C.B. 1965-2, 94, and which are no less stringent in any respect than the conditions which must be met by an individual to be eligible for total and permanent disability benefits under section 223 of the Social Security Act. This latter requirement will be deemed to be satisfied if the plan provides that an employee is eligible for disability benefits under the plan only if he is eligible for disability benefits under the Social Security Act. The plan may provide that an employee who has applied for disability benefits under the Social Security Act is eligible for disability benefits under the plan pending the disposition of such application by the Social Security Administration.

.02 Offset plans. Disability benefits provided under an offset plan are integrated only if the plan provides that such benefits are payable only where an employee satisfies eligibility conditions which meet the requirements of Part 5(m) of Revenue Ruling 65-178, and the amount of the offset to such benefits is computed on the basis of the disability benefit under the Social Security Act (as in effect at the time of the employee's retirement for disability) actually received by the employee.

.03 Plans with other eligibility conditions. If a plan provides that disability benefits are payable under conditions which do not meet the requirements of section 3.01 or 3.02 (whichever is applicable), such benefits will be treated as early retirement benefits and must satisfy the applicable requirements of section 10 or 11 of Rev. Rul. 69-4 (whichever is applicable). In determining whether such requirements are satisfied, a special disabled life mortality table may not be used in the computation of equivalent actuarial values.