- 38 -
cost of their death benefits ($7,500). Young & Young deducted
the full contribution on its 1989 tax return.
Young & Young's three employees (the Youngs and Carleen
Garcia) became Covered Employees under the Prime Plan as of
December 1, 1989. On January 14, 1992, Elaine Young executed an
addendum to Young & Young's Adoption Agreement electing
retroactively to waive her right to participate in the Prime
Plan. In all, Young & Young executed the following Adoption
Agreements during its participation in the Prime Plan:
Date effective 12/01/89 12/01/89 12/01/89 12/01/89 12/01/89
DWB percentage Not listed Not listed 1.55% 1.907% 3.814%
Years of service Not listed Not listed 10 10 10
Vesting schedule 4/40 4/40 4/40 4/40 4/40
Normal retirement age 55 55 55 55 65
Death benefit multiple Not listed Not listed 2.320 3.330 3.330
Date executed 12/01/89 12/01/89 4/06/90 06/23/92 12/30/92
D. Administration of Young & Young's Account in the Prime
Plan
Improved Funding Techniques, Inc. (IFTI), prepared the 1989
annual report for Young & Young's account in the Prime Plan, and
IFTI delivered the report to Howard Young on December 27, 1991.
The report included an actuarial valuation signed by Deloitte &
Touche and provided the following calculation of vested DWB's for
Young & Young's Covered Employees:
1988 Accrual Years of Vesting Vested
Compensation percentage Service percent DWB
Howard Young $111,500 3.814% 10 100%$42,526
Carleen Garcia 11,3323.814 2 - 0 - - 0 -
The 1989 report addressed only Young & Young's Employee
Group, and it did not provide any information concerning the
Trust as a whole. The report used a 3.814 accrual percentage for
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