The IRS issued Revenue Ruling 2012-5 on January 5, 2012. Revenue Ruling 2012-5 provides tables of covered compensation under Section 401(l)(5)(E) of the Internal Revenue Code for the 2012 plan year that are used for determining:

Permitted disparity in defined contribution plans refers to a plan benefit formula used to compute and allocate nonelective contributions, where the formula results in participants with covered compensation above the Social Security taxable wage base receiving a higher percentage of contributions.

For determining covered compensation for the 2012 plan year, the taxable wage base is $110,100, increased from the $106,800 taxable wage base applicable for 2011.

Revenue Ruling 2012-5 is scheduled to be published on January 30, 2012 in Internal Revenue Bulletin 2011-31.

For more information on key requirements applicable to defined benefit and defined contribution plans, see Practice Note, Requirements for Qualified Retirement Plans. For more information on the IRS correction procedure available to correct errors in qualified plans, see Practice Note, Correcting Qualified Plan Errors under EPCRS.