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petitioner’s other actions regarding the VEBA Trust, shows that
petitioner did not accumulate assets in the VEBA Trust for the
purpose of funding a reserve for postretirement benefits. See
General Signal Corp. & Subs. v. Commissioner, supra at 239.
In General Signal, the Court acknowledged that there was no
requirement of a separate account. Petitioner argues that the
suggestion that money must be maintained in a fund in at least
the amount of the deduction is inconsistent with the Court’s
position in General Signal. There is no such inconsistency. In
General Signal, the Court stated:
With respect to petitioner’s argument that
respondent’s interpretation of section 419A(c)(2) would
require a separate accounting requirement, respondent
contends that it is sufficient that the reserve
required by section 419A(c)(2) be funded with general
rather than specific assets. This interpretation
appears consistent with legislative intent and requires
only that the overall balance maintained in the VEBA be
sufficient to support the postretirement reserve. It
does not appear to require that a separate account be
established with respect to the reserve. [Id. at 246.]
An interpretation of section 419A(c) that requires such a
reserve to be established, petitioner argues, could prevent the
fund from paying current benefits because the reserves would be
required to be maintained. Petitioner also believes that such an
interpretation would also result in the imposition of minimum
funding as is required under section 412 for qualified plans.
Petitioner further argues that “funded over the working lives”
describes the manner in which the reserves are to be computed and
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