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products controlling motion, flow, and pressure. On June 30,
1987, petitioner had approximately 28,708 employees, of whom
approximately 1,854 were represented by unions.
On June 30, 1987, petitioner established the Parker-Hannifin
Employees Welfare Benefit Trust (the VEBA Trust) with Ameritrust
Company National Association (Ameritrust) as trustee. The VEBA
Trust was to serve as the funding medium for certain employee
welfare benefit plans that petitioner intended to make up a
Voluntary Employees’ Beneficiary Association (VEBA). Petitioner
established the VEBA Trust pursuant to the terms of the Trust
Agreement Creating the Parker-Hannifin Corporation Voluntary
Employees’ Beneficiary Association (Trust Agreement).
The VEBA Trust was created to provide “health care,
disability, life, and other welfare benefits under the Plans to
Members, Dependents, and Beneficiaries, other than post-
retirement health care and life benefits for ‘key employees,’ as
that term is defined in Section 416(i) of the Code.” Under the
terms of the Trust Agreement:
The Corporation [petitioner intended] to make
contributions, on a sound actuarial basis, to the
Trustee, on or before the last day of the Corporation’s
fiscal year, in such amounts as determined to be
necessary to provide benefits required under the Plans.
The Corporation’s determination of such contributions
shall be final and conclusive upon all persons. * * *
The Trust Agreement also provided that “Notwithstanding any
provision of this Agreement to the contrary, in no event shall
the Corporation be required to continue to fund benefits under
any Plan through the Trust.” Contributions to the VEBA Trust
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