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The person primarily responsible for the implementation and
funding of the VEBA Trust was Joseph B. Dorn (Dorn). Dorn was
director of taxation for petitioner on June 30, 1987. Dorn
computed the VEBA contribution and claimed deduction on a single
sheet of paper. Dorn is not an actuary.
The explanation of the calculation of each portion of the
1987 contribution follows below.
Incurred But Unpaid Medical, Dental, and Short-Term Disability
Benefits
Dorn contacted Provident to obtain an estimate of the
reserve for medical, dental, life, and short-term disability
expenses incurred but unpaid before June 30, 1987. Provident
provided Dorn with the amount of $9,022,227.
Expenses incurred but unpaid before June 30, 1987, for
employees covered under collective bargaining agreements were
included in the $9,022,227. Expenses estimated to be incurred
but unpaid after June 30, 1987, for employees covered under a
collective bargaining agreement were included in the $3,210,000
contribution for union medical benefits.
Petitioner's 1987 contribution included $9,022,227 for
incurred but unpaid medical, dental, and short-term disability
benefits.
Postretirement Benefits--Retirees
Reserve Computation
Dorn obtained the actual fiscal 1987 expenses incurred
through April 1987 for benefits paid to hourly and salaried
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