- 12 -
contributions, and interest income, to pay the current cost of
providing benefits to petitioner’s employees and retirees as
benefits came due during fiscal 1988 and the first 2 months of
fiscal 1989. Beginning in August 1988, the VEBA Trust used its
assets, consisting solely of amounts that were currently
contributed and currently deducted by petitioner along with
employee contributions, to pay the current cost of providing
benefits to petitioner’s employees and retirees as benefits
became due.
The following table reflects the deposits, earnings, and
withdrawals affecting the VEBA Trust for fiscal 1987, 1988, 1989,
and 1990:
Fiscal Years
1987 1988 1989 1990
Employer
contributions $42,000,000.00-0- 1$40,737,374.592$50,783,404.03
Employee
contributions -0- $ 1,555,626.861,841,554.51 2,505,955.35
Interest earned 3773.981,749,030.80 78,641.10 -0-
Benefits paid -0- 39,153,640.8348,808,587.0353,289,359.38
Ending balance 42,000,773.986,151,016.83 -0- -0-
1Represents the total of petitioner’s monthly contributions to the VEBA Trust.
2Represents the total of petitioner’s monthly contributions to the VEBA Trust.
3The amounts to which the parties have stipulated in later years ignore this amount.
In August 1988, petitioner filed Form 1024, Application for
Recognition of Exemption, for the VEBA. Unaudited financial
statement information for petitioner’s 1988 year that was
included with the application indicated that, on June 30, 1988,
the VEBA Trust had a balance of $6,378,125.82. Benefits paid
were shown as $42,450,649.30. The only contributions to the VEBA
Trust were those from employees and from investment income.
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