What Is Permitted Disparity in a 401(k)?

Permitted disparity is a narrow statutory exception, not permission to give higher-paid employees whatever employer contribution rate the sponsor wants.

Section 401(l) allows a qualified plan to recognize part of the structure of Social Security when setting employer contribution rates.^[1][2]

For a defined contribution excess plan, the formula can apply:

• a base contribution percentage to compensation up to an integration level
• a higher excess contribution percentage to compensation above that level.^[1]

The difference between those two percentages is the disparity.

That difference is capped.

The integration level is regulated.

The formula must be uniform in the manner required by the rule.^[1]

And the resulting employer allocation still has to fit Section 415, the annual compensation limit, plan-document terms and the other qualification rules that apply.

Key Takeaways

• Permitted disparity is often called Social Security integration.
• No Social Security money enters the 401(k). The term describes how the employer allocation formula is structured.
• The plan generally applies one contribution percentage below an integration level and a higher percentage above it.^[1]
• The higher rate on compensation beyond the threshold is limited by the maximum excess allowance.^[1]
• That allowance is generally the lesser of the plan's base contribution percentage or the applicable regulatory disparity factor.^[1]
• The familiar factor is 5.7% before any integration-level reduction, but 5.7% is not automatically available in full.^[1]
• If the base rate is 3%, the disparity generally cannot exceed 3 percentage points even when the regulatory factor is 5.7%.
• The integration level can equal Social Security’s annual taxable maximum or use other permitted values.^[1]
• For 2026, the OASDI contribution-and-benefit base is $184,500.^[4][5]
• Twenty percent of that amount is $36,900; 80% is $147,600.
• An intermediate integration level above $36,900 and not above $147,600 reduces the regulatory factor to 4.3%.^[1]
• A level above $147,600 but below $184,500 uses a 5.4% factor.^[1]
• Using the full $184,500 taxable maximum invokes the separate wage-base rule rather than the intermediate 5.4% band.^[1]
• Under the wage-base integration method, the plan-year opening date determines which Social Security base applies.^[1]
• Permitted disparity differs fundamentally from new comparability: integration is formula-based; new comparability relies on employee groups and general nondiscrimination testing.
• Integrated employer contributions count toward the participant's Section 415 annual additions.^[6]
• For 2026, the qualified-plan compensation limit is $360,000 and the defined contribution dollar ceiling is $72,000, subject to the 100%-of-compensation rule and catch-up treatment.^[6][7]

Why Social Security Is Part of the Logic

Social Security does not tax wages without limit.

The OASDI taxable maximum caps the amount of earnings subject to Social Security tax for a year.^[4]

For 2026, that taxable maximum is:

$184,500.^[4][5]

Qualified-plan permitted-disparity rules allow a plan, within strict limits, to provide a higher employer contribution rate on compensation above a valid integration level.^[1][2]

The policy idea is not:

higher-paid employees deserve more.

It is that the qualified-plan formula can recognize the wage threshold built into Social Security.

The tax code then places boundaries around how much disparity the employer plan may provide.

What the Formula Looks Like

A simplified integrated formula has two compensation bands.

Compensation up to the integration level

Apply the:

base contribution percentage

Compensation in the Excess Band

Apply the:

excess contribution percentage

For example, set the threshold at $184,500, apply 5% below it and 10% above it.

An employee with compensation below $184,500 receives 5% under this simplified formula.

An employee with compensation above the threshold receives:

• 5% on the first $184,500
• 10% on the compensation above $184,500

subject to the annual compensation cap and other limits.

The Disparity Is the Difference Between the Rates

With a 5% lower-band rate and 10% upper-band rate, the disparity is:

10% − 5% = 5 percentage points

That 5-point difference is what Section 401(l) regulates.^[1]

The question is not simply:

Is 10% a permitted employer contribution rate?

The relevant question is:

How much higher is the excess rate than the base rate, and is that difference permitted for this integration level?

The 5.7% Figure Is Commonly Misunderstood

The defined contribution rule caps the disparity using the lesser of:

1. the base contribution percentage, or
2. the applicable regulatory factor, generally beginning with 5.7% before specified reductions.^[1]

This produces a result that many summaries miss.

A plan does not receive a guaranteed:

base rate + 5.7%

formula.

The base rate itself can be the tighter constraint.

Example: 5% Base Rate

Start with a 5% base contribution percentage. Against a 5.7% regulatory factor, the allowable spread is:

lesser of 5% and 5.7% = 5%

So the highest excess rate under that calculation is:

5% + 5% = 10%

not:

10.7%

That is why a 5% / 10% formula can fit when the taxable-wage-base integration method otherwise supports the unreduced factor.

Example: 3% Base Rate

Now use a 3% base contribution percentage. Even with a 5.7% regulatory factor, the base percentage controls.

Permitted spread:

3%

Highest upper-band rate:

3% + 3% = 6%

A formula using:

3% below the integration level / 8.7% above it

would treat 5.7% as a free add-on.

That is not how the regulatory ceiling works.^[1]

Example: 8% Base Rate

With an 8% base percentage, the 5.7% regulatory factor becomes the tighter ceiling.

Permitted spread:

5.7%

Highest upper-band rate:

13.7%

Here the regulatory factor—not the base percentage—is the binding constraint.

This is the other side of the lesser-of rule.

A 2026 Full-Wage-Base Example

For a calendar-year example, use a $184,500 integration threshold, a 5% lower-band rate, a 10% upper-band rate and $300,000 of participant compensation.

Lower-band allocation:

5% × $184,500 = $9,225

Compensation above integration level:

$300,000 − $184,500 = $115,500

Upper-band allocation:

10% × $115,500 = $11,550

Total integrated employer allocation:

$20,775

A simple 5% pro-rata contribution on $300,000 would have been:

$15,000

The integrated formula produces an additional:

$5,775

because compensation above the threshold receives the higher permitted rate.

Effective Contribution Percentage Is Not the Same as the Excess Rate

In that example:

Total allocation:

$20,775

Compensation:

$300,000

Effective employer allocation percentage:

6.925%

The plan's stated excess contribution percentage is:

10%

Those are not contradictory.

Only compensation above $184,500 receives the 10% rate.

This matters when comparing integrated plans with pro-rata or group-based formulas.

The Integration Level Can Differ From the OASDI Base

The defined contribution rule permits several integration-level structures.^[1]

A plan can use:

• Social Security’s annual taxable maximum
• a qualifying lower single dollar amount
• a qualifying intermediate dollar amount.

But choosing a different threshold can change the allowable regulatory spread.

That is the part often omitted from simplified explanations.

2026 Thresholds

Social Security's 2026 taxable maximum is:

$184,500.^[4]

Twenty percent:

$184,500 × 20% = $36,900

Eighty percent:

$184,500 × 80% = $147,600

The regulation's intermediate-level table can therefore be translated for a calendar-year 2026 plan this way:

The pattern is not linear.

A higher integration level does not simply produce a steadily larger or smaller permissible disparity.

Why $100,000 Produces a Different Result

Use a 2026 integration level of:

$100,000

That falls between:

$36,900 and $147,600

The applicable regulatory factor is therefore:

4.3%.^[1]

Assume base contribution rate:

5%

Maximum disparity:

lesser of 5% and 4.3% = 4.3%

Maximum excess contribution rate:

9.3%

A 5% / 10% formula that could work at the full taxable wage base would be too aggressive at this $100,000 intermediate level.

Same base rate.

Different integration threshold.

Different legal ceiling.

Example: $160,000 Integration Level

Use $160,000 as the integration threshold.

That is:

• above $147,600
• below $184,500.

The regulation uses:

5.4%

as the reduced factor for that band.^[1]

If the base rate is:

5%

the maximum disparity remains:

5%

because the lesser-of test compares 5% with 5.4%.

The upper-band rate can therefore reach:

10%

The reduced regulatory factor does not matter in this example because the 5% base rate is already lower.

Example: 6% Base at $160,000

Keep the $160,000 threshold but raise the lower-band rate to 6%.

The applicable factor is 5.4%, so the permitted spread is 5.4 percentage points.

The upper-band rate can reach:

11.4%

Now the intermediate-level reduction matters.

Without the reduction, someone might incorrectly assume:

11.7%

using a 5.7-point spread.

The plan would be 0.3 percentage point too high above the threshold.

A Lower Integration Level Can Reduce the Allowed Spread

This is counterintuitive.

A sponsor might assume:

"If we start the higher rate earlier, we should be able to use the same disparity."

Not necessarily.

For specified intermediate levels, Treasury reduces the factor to:

• 4.3%, or
• 5.4%.^[1]

Starting the excess rate earlier can therefore come with a smaller allowable spread.

The design trades:

where the higher rate begins

against:

how much higher that rate may be.

The Full $184,500 Threshold Is a Distinct Route

A common error is to put:

$184,500

into the final intermediate band because it is obviously above 80% of the OASDI base.

The regulation does not do that.

The intermediate band applies to an amount:

less than the OASDI contribution-and-benefit base.^[1]

A plan using the full OASDI base falls under the separate wage-base provision.^[1]

That distinction is why the factor can move from:

5.4% just below the wage base

back to the unreduced framework at:

the wage base itself.

The Plan-Year Start Date Locks the Wage Base

The regulation fixes the relevant OASDI base as:

the amount in effect when the plan year begins.^[1]

This matters for non-calendar-year plans.

Suppose a plan year begins:

July 1, 2025

and ends:

June 30, 2026

The 2026 wage base does not automatically replace the threshold on January 1, 2026.

For this method, the threshold is the OASDI base in force on the plan year's opening date.^[1]

That would point to the 2025 base rather than the 2026 base.

A July 1, 2026 Plan Year Uses the 2026 Wage Base

Now shift the start date to:

July 1, 2026

The 2026 OASDI base is already in effect:

$184,500.^[4]

That amount is the relevant beginning-of-plan-year wage base for the integration rule.

The plan does not wait until January 2027 merely because most of the plan year extends into another calendar year.

Plan-year timing matters.

Short Plan Years Can Require Proration

The same defined contribution regulation contains a special rule for certain plan years shorter than 12 months.^[1]

When the specified compensation definitions apply, the otherwise applicable integration level is multiplied by:

months in short plan year ÷ 12

The rule does not simply tell the sponsor to use the full annual wage base for a six-month plan year.

Short-year plan design requires a separate calculation.

Uniformity Is Part of the Safe Harbor

The defined contribution permitted-disparity regulation generally requires uniform disparity.^[1]

The rule generally requires the same base and excess contribution percentages for employees subject to the integrated formula.^[1]

This is a major difference from new comparability.

Permitted disparity is not built around saying:

Owner group gets 15%; staff group gets 4%.

It is built around one integrated formula applied to compensation bands.

Two Employees Under the Same Formula

Apply one formula to both employees: 5% below $184,500 and 10% above it.

Employee A compensation:

$100,000

Employee A result:

$5,000

Employee B compensation:

$300,000

Employee B result:

$20,775

Employee B receives a higher effective percentage because more compensation falls into the excess band.

The formula itself did not assign Employee B to a favored group.

Both employees were run through the same compensation-band rule.

Permitted Disparity vs. New Comparability

INV-102 covers new comparability.

The distinction is structural.

Calling both:

"ways to give owners more"

throws away the legal distinction.

Permitted Disparity Can Favor Higher Compensation Without Being Free-Form

An integrated formula often produces a higher effective employer contribution rate for employees whose compensation exceeds the integration level.

Those employees may disproportionately be HCEs.

Section 401(l) supplies the statutory framework under which specified disparity can be disregarded for nondiscrimination purposes when its requirements are met.^[2]

That does not mean every other qualification requirement disappears.

A Valid Integration Formula Does Not Pass Every Qualification Test

Section 1.401(l)-1 makes this explicit.

A plan can satisfy the permitted-disparity rules and still fail Section 401(a)(4) for another reason.^[2]

A disparity outside this statutory safe route is not automatically fatal if the plan can satisfy the applicable general nondiscrimination rules through another lawful method.^[2]

It is a defined safe route for specified disparity.

It is not the entire qualification code.

Section 410(b) Coverage Still Matters

An integrated allocation formula can be perfectly calculated for every participant who benefits.

The plan can still have a coverage problem if the benefiting population improperly excludes too many NHCEs.

INV-089 covers Section 410(b).

Formula compliance and employee coverage answer different questions.

Related Employers Still Matter

INV-090 and INV-091 explain controlled groups and affiliated service groups.

If related entities must be treated as one employer, employees outside the sponsoring legal entity can affect:

• eligibility
• coverage
• HCE classification
• nondiscrimination
• overall permitted-disparity limits.

A sponsor cannot protect an integrated formula by ignoring employees whom the tax rules treat as part of the employer group.

Multiple Plans Can Trigger Overall Permitted-Disparity Limits

Section 1.401(l)-5 prevents an employer from stacking permitted disparity without limit across multiple plans.^[3]

If an employee benefits under more than one plan maintained by the employer, the regulation applies an annual overall permitted-disparity limit.^[3]

At a high level, the employee's total annual disparity fraction cannot exceed:

1.^[3]

The calculation becomes more technical when multiple plans use or impute disparity.

The important operational point is simple:

Do not test each integrated plan as though the other plans do not exist.

Cumulative Rules Become Especially Important With Defined Benefit Plans

The same regulation also contains cumulative overall limits.^[3]

For an employee who has not benefited under a defined benefit plan during the relevant period, the regulation generally treats the cumulative limit as satisfied.^[3]

When defined benefit plan participation exists, a 35-unit cumulative disparity framework can become relevant.^[3]

That is not a routine calculation for an ordinary single 401(k) profit-sharing plan.

It is important when the employer maintains multiple retirement programs or has plan-history complexity.

The 2026 Compensation Cap Still Applies

INV-098 covers qualified-plan compensation.

For 2026, the Section 401(a)(17) compensation limit is:

$360,000.^[6][7]

An integrated formula cannot simply use unlimited compensation because the employee earns more than Social Security's taxable maximum.

The Social Security threshold and the qualified-plan compensation ceiling solve different problems.

Example: Employee Earns $500,000

Use a calendar-year 2026 plan with a $184,500 threshold, 5% below it and 10% above it.

Actual employee pay:

$500,000

Applicable qualified-plan compensation cap:

$360,000

Lower-band allocation:

$9,225

Compensation above integration level but within qualified-plan cap:

$360,000 − $184,500 = $175,500

Excess-band allocation:

10% × $175,500 = $17,550

Total employer allocation under the simplified formula:

$26,775

The formula does not use the employee's full $500,000.

Section 415 Is Another Independent Ceiling

INV-099 covers annual additions.

For 2026, the defined contribution dollar limit is:

$72,000

subject to the 100%-of-compensation rule and qualifying catch-up treatment.^[6]

An integrated profit-sharing contribution enters that annual-additions stack along with counted sources such as:

• regular employee elective deferrals
• employer match
• other nonelective employer contributions
• allocated forfeitures.^[6]

A legal Section 401(l) allocation can therefore still require a Section 415 reduction.

Example: Integrated Allocation Meets Section 401(l) but Hits Section 415

Participant already has:

Regular elective deferrals:

$24,500

Employer match:

$20,000

Forfeiture allocation:

$4,000

Subtotal:

$48,500

Integrated profit-sharing formula produces:

$26,775

Combined annual additions:

$75,275

Before any applicable catch-up treatment, the total is:

$3,275 above the 2026 $72,000 dollar ceiling.

The permitted-disparity formula did not cause Section 401(l) trouble.

Section 415 is the binding rule.

Top-Heavy Can Create Another Employer Minimum

INV-086 explains top-heavy plans.

If the plan is top-heavy, non-key employees can be entitled to a minimum employer contribution under Section 416.^[12]

An integrated allocation may help satisfy that minimum.

But the sponsor must calculate the top-heavy requirement under its own rules.

Do not assume that a valid Section 401(l) formula automatically produces enough for every non-key employee.

Employee Deferrals Do Not Become Integrated

Permitted disparity applies to the employer-provided contribution or benefit framework described by Section 401(l).^[1][2]

It does not mean the employee can defer:

• 5% of salary below the OASDI threshold
• 10% above it

outside the ordinary Section 402(g) framework.

Employee elective deferrals have their own limits and nondiscrimination rules.

INV-100 covers the person-level elective-deferral limit.

Employer Match Is Not Automatically the Integrated Source

A 401(k) can contain:

• elective deferrals
• matching contributions
• profit-sharing contributions.

The plan's integrated formula ordinarily applies to the employer contribution source written to use permitted disparity.

Do not assume every employer dollar follows the integration bands simply because the overall plan is described as:

integrated.

Read the source-specific plan terms.

Compensation Definition Still Matters

An integrated formula depends on compensation.

INV-098 explains why the correct compensation number must be identified for the specific plan purpose.

Suppose the plan requires bonus compensation to be included.

Employee:

Base pay:

$170,000

Bonus:

$30,000

Total plan compensation:

$200,000

With a $184,500 integration level, some pay belongs in the excess band.

If payroll sends only the $170,000 base amount, the employee appears to have:

$0 of pay in the excess band.

The integration formula can be mathematically perfect and still under-allocate because the compensation input is wrong.

Integration Level Must Come From the Plan

Treasury requires the integration level to be specified in the plan or determined under a formula specified by the plan.^[1]

A TPA should not choose:

$100,000 this year

because it produces a more attractive owner contribution.

Nor should payroll automatically substitute the current OASDI taxable maximum if the document specifies a different lawful integration method.

The written formula drives the operation.

Changing the Integration Level Is a Plan-Design Decision

Suppose a sponsor currently uses:

taxable wage base

and wants to change to:

$100,000

for the next year.

That change can alter:

• where the higher rate begins
• the applicable disparity factor
• participant allocations
• employer contribution cost
• qualification testing.

It is not merely a spreadsheet assumption.

The plan document and amendment timing need to support the change.

The Intermediate-Factor Table Creates Non-Obvious Economics

For 2026:

At $36,900 or below

The regulatory factor can remain at the unreduced 5.7% framework.

At $100,000

Factor:

4.3%

At $160,000

Factor:

5.4%

At $184,500

Taxable-wage-base route returns to the unreduced framework.

That sequence looks strange if the rule is viewed as a simple graduated schedule.

It makes more sense when read as separate permitted integration structures with specific statutory adjustments.

Choosing the "Lowest Threshold" Is Not Automatically Optimal

A lower integration level means more compensation falls into the higher contribution band.

That can increase employer cost.

It can also change the regulatory ceiling on the rate spread.

A sponsor comparing formulas should model:

1. chosen integration level
2. base contribution percentage
3. maximum permissible disparity
4. actual employee compensation distribution
5. Section 415 impact
6. overall employer contribution.

The threshold alone does not tell you whether the design is efficient.

Worked Comparison: Same Base Rate, Different Integration Levels

Hold the lower-band rate at 5% and employee compensation at $250,000.

Design A: integration at $184,500

Maximum disparity can be 5 percentage points because the base rate is the limiting factor.

Use an upper-band rate of:

10%

Design A calculation:

• 5% × $184,500 = $9,225
• 10% × $65,500 = $6,550

Total:

$15,775

Design B: integration at $100,000

At the $100,000 threshold, the regulatory factor is 4.3%, so a 5% base permits an upper-band rate of:

9.3%

Design B calculation:

• 5% × $100,000 = $5,000
• 9.3% × $150,000 = $13,950

Total:

$18,950

Lowering the integration level increased the total contribution even though the permitted spread fell from 5 points to 4.3.

The threshold and rate spread interact.

The Integrated Formula Can Cost More for NHCEs Too

Permitted disparity is not inherently an owner-only cost-saving design.

An NHCE whose pay crosses the threshold receives the same higher rate on that upper band under a uniform formula.

If several non-owner employees earn above the threshold, the employer cost can rise materially.

This is another difference from a carefully grouped new-comparability design.

Who Usually Benefits Most?

An employee receives the largest dollar effect from permitted disparity when:

• compensation materially exceeds the integration level
• the plan uses a meaningful disparity
• the employee has enough compensation below the annual cap
• Section 415 does not reduce the result.

That often describes owners and senior employees.

But the formula follows compensation, not title.

A highly compensated non-owner and an owner with the same eligible compensation can receive the same integrated allocation under a uniform formula.

Correction Starts With the Written Formula

Common operational errors include:

• wrong taxable wage base for the plan year
• wrong integration level
• wrong base percentage
• excess percentage above the permitted maximum
• incorrect compensation
• failure to apply the annual compensation cap
• omission of another plan from overall disparity analysis
• Section 415 over-allocation.

The first correction question is:

What allocation should the plan document and applicable law have produced?

The remedy follows the type of failure and current correction rules.^[9][11]

A Wrong Wage Base Can Affect Every Higher-Paid Participant

Suppose a calendar-year 2026 plan should use:

$184,500

but administration mistakenly uses the 2025 taxable wage base:

$176,100.^[4]

The higher excess rate begins:

$8,400 too early

for every participant with compensation above $184,500.

At a 5-percentage-point disparity, the maximum raw over-allocation attributable solely to that threshold error can be:

$8,400 × 5% = $420 per affected participant

before considering the full plan formula and other limits.

A small input error becomes a systematic plan-wide error.

Non-Calendar Plans Create the Opposite Risk

For a plan year beginning in 2025 and ending in 2026, using:

$184,500

simply because the allocation is being calculated in 2026 can be wrong.

The rule looks to the OASDI base in force when that plan year started.^[1]

The calendar printed on the administrator's screen is not the rule.

Frequently Asked Questions

What is permitted disparity in a 401(k)?

It is a qualified-plan rule under Section 401(l) that permits specified differences in employer contribution rates when a defined contribution plan uses a compliant integration formula.^[1][2]

Is permitted disparity the same as Social Security integration?

The terms are commonly used together. The formula recognizes the Social Security taxable-wage structure by permitting a higher employer contribution rate above a valid integration level.

Does Social Security put money into the 401(k)?

No. All qualified-plan employer contributions still come from the employer. "Integration" describes the contribution formula.

What is the Social Security taxable wage base for 2026?

$184,500.^[4][5]

Does the integration level have to be $184,500 in 2026?

No. Other qualifying thresholds are allowed, but intermediate levels can reduce the permitted rate spread.^[1]

What is the maximum permitted disparity?

The allowable spread is generally whichever is lower: the plan’s base percentage or the applicable regulatory factor.^[1]

Is the maximum always 5.7%?

No. The lower-band rate can be below 5.7%, and specified intermediate thresholds reduce the regulatory factor to 4.3% or 5.4%.^[1]

If the base contribution is 3%, can the excess rate be 8.7%?

Generally not under the simple maximum-excess-allowance calculation. The base percentage would cap disparity at 3 percentage points, producing a maximum excess rate of 6%.

What are the 2026 intermediate integration thresholds?

For 2026, 20% of $184,500 is $36,900, while 80% is $147,600.

What factor applies to a $100,000 integration level in 2026?

Because $100,000 is above $36,900 and not above $147,600, the regulatory factor is 4.3% before applying the lesser-of-base-percentage rule.^[1]

What factor applies at $160,000?

Because $160,000 is above 80% of the 2026 Social Security base but below the full $184,500 threshold, the factor is 5.4%.^[1]

What happens at exactly $184,500?

The plan uses the taxable-wage-base integration provision rather than the intermediate-level band.^[1]

Does the January 1 wage base always apply?

Only for a calendar-year plan. A non-calendar plan uses the OASDI base in force on its own opening date.^[1]

Is permitted disparity the same as new comparability?

No. Permitted disparity uses a uniform compensation-band formula under Section 401(l). New comparability uses allocation groups and general nondiscrimination/cross-testing rules.

Does an integrated contribution count toward the $72,000 limit?

Yes. Employer profit-sharing allocations are part of the Section 415 annual-additions calculation.^[6]

Can compensation above $360,000 be used in the 2026 formula?

The qualified-plan annual compensation limit is $360,000 for 2026 when that cap applies.^[6][7]

Can an integrated plan still be top-heavy?

Yes. Section 401(l) permitted disparity and Section 416 top-heavy rules are separate analyses.^[12]

What if the employer has more than one qualified plan?

The overall permitted-disparity rules can require coordination across plans maintained by the employer.^[3]

The Integration Check

For a defined contribution integrated formula, verify the calculation in this order:

1. What is the plan year?
2. What integration level does the document specify?
3. What taxable wage base was in effect at the beginning of that plan year?
4. What regulatory factor applies to that integration level?
5. What is the plan's base contribution percentage?
6. Which is lower: the base percentage or the regulatory factor?
7. Does the excess rate stay within that disparity?
8. Was the correct plan compensation used?
9. Does the $360,000 compensation cap apply?
10. Do all counted contribution sources fit Section 415?
11. Are other employer plans relevant to the overall permitted-disparity rules?
12. Was the exact written formula followed?

The most useful question is not:

"Does this plan use Social Security integration?"

It is:

"Which integration level, which base rate, which disparity factor and which plan-year wage base control this allocation?"

Sources & References

1. 26 CFR §1.401(l)-2: Permitted Disparity for Defined Contribution Plans
2. 26 CFR §1.401(l)-1: Permitted Disparity in Employer-Provided Contributions or Benefits
3. 26 CFR §1.401(l)-5: Overall Permitted Disparity Limits
4. Social Security Administration: Contribution and Benefit Base
5. Social Security Administration: 2026 COLA Fact Sheet
6. IRS: 401(k) and Profit-Sharing Plan Contribution Limits
7. IRS Publication 560: Retirement Plans for Small Business
8. IRS: Choosing a Retirement Plan — Profit-Sharing Plan
9. IRS: Retirement Plan Document Checklists — Permitted Disparity
10. IRS: Defined Contribution Plan Listing of Required Modifications
11. IRS: Retirement Plan Errors Eligible for Self-Correction
12. IRS: Is My 401(k) Top-Heavy?

Educational Disclaimer

ROIStreet publishes educational content about retirement-plan allocation formulas and qualification rules. This article is not legal, tax, actuarial, fiduciary or plan-administration advice. Permitted-disparity treatment depends on the written plan, plan year, integration level, compensation definition, employer structure, other retirement plans and current law.

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