Rev. Rul. 83-53

PURPOSE

The purpose of this revenue ruling is to amplify Rev. Rul. 71-446, 1971-2 C.B. 187, by providing an adjustment factor for another type of lump sum death benefit.

BACKGROUND INFORMATION

Rev. Rul. 71-446 provides guidelines for determining whether the benefits provided by a retirement plan integrate with the benefits under social security.

Section 8.01 of Rev. Rul. 71-446 provides adjustment factors for several common types of pre-retirement lump sum death benefits. These adjustments are made to the otherwise applicable integration limitation. Section 8.011 provides for an adjustment factor of 8/9 for a death benefit "(n)ot exceeding the greater of the reserve or the total prior contributions on a typical individual level annual premium funding method, and provides no other death benefits or life insurance the current cost of which is not includible in the gross income of the employee."

A death benefit equal to the present value of the participant's accrued benefit will, in many situations, exceed the death benefit described in section 8.011 of Rev. Rul. 71-446. Thus, that section does not apply for a plan that provides a lump sum death benefit of the present value of the accrued benefit.

BASIC GUIDELINE

Section 8.01 of Rev. Rul. 71-446 is supplemented to add a fourth adjustment factor. If a plan satisfies the requirements of section 4 except that it provides benefits in case of death before retirement not exceeding the greater of (a) the present value of the participant's accrued benefit at death, or (b) the benefit described in section 8.011, such plan is integrated if the benefits or the offset to the benefit does not exceed 8/9 of the limitation which would be applicable if the plan did not provide such death benefits.

EFFECT ON OTHER REVENUE RULINGS

Rev. Rul. 71-446 is amplified.