Robert D. Booth and Janice Booth, et al. - Page 63

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               paid employees would receive substantial benefits from                 
               the plan. * * *                                                        
                    Thus, the committee is concerned that substantial                 
               advance funding of welfare benefits will ultimately                    
               lead to an unacceptable tax burden for many taxpayers                  
               who do not participate in these programs. * * *                        
               [H. Rept. 98-432 (Part 2), at 1275-1276 (1984).]                       
               As reflected in the report of the conference, the Congress             
          enacted subpart D with the understanding that subpart D's                   
          principal purpose was “to prevent employers from taking premature           
          deductions, for expenses that have not yet been incurred, by                
          interposing an intermediary organization which holds assets which           
          are used to provide benefits to the employees of the employer.”             
          H. Conf. Rept. 98-861, at 1155 (1984); 1984-3 C.B. (Vol. 2) 1,              
          409.  The conference report states that                                     
               "While in many cases welfare benefit funds are designed                
               to function in a manner similar to insurance                           
               arrangements, the conference [was] concerned that there                
               [were] no clear standards of limitations applicable to                 
               such funds that [prevented] their utilization for                      
               substantial nonqualified deferred compensation funding                 
               outside the general pension plan funding, accrual and                  
               vesting rules."  [Id. at 1155.]                                        
          The conference report commented as follows on the meaning of the            
          term "funds":                                                               
               a retired life reserve or premium stabilization account                
               ordinarily is to be considered a fund or part of a                     
               fund, since such an account is maintained for an                       
               individual employer and that employer has a                            
               determinable right to have the amount in such an                       
               account applied against that employer's future costs of                
               benefit claims or insurance premiums.  A similar                       
               situation exists with respect to premium arrangements,                 
               under which an employer may, in some cases, pay an                     
               insurance company more in a year than the benefit costs                
               incurred in that year and the employer has an                          




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