Sherwin-Williams Company Employee Health Plan Trust - Page 12




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          419A(c) provides:                                                           
               SEC. 419A. QUALIFIED ASSET ACCOUNT; LIMITATION ON                      
               ADDITIONS TO ACCOUNT.                                                  
               (c) Account Limit.–-For purposes of this section–-                     
                    (1) In general.–-Except as otherwise provided in                  
               this subsection, the account limit for any qualified                   
               asset account for any taxable year is the amount rea-                  
               sonably and actuarially necessary to fund–-                            
                         (A) claims incurred but unpaid (as of the                    
                    close of such taxable year) for benefits referred                 
                    to in subsection (a), and                                         
                         (B) administrative costs with respect to such                
                    claims.                                                           
                    (2) Additional reserve for post-retirement medical                
               and life insurance benefits.–-The account limit for any                
               taxable year may include a reserve funded over the                     
               working lives of the covered employees and actuarially                 
               determined on a level basis (using assumptions that are                
               reasonable in the aggregate) as necessary for–-                        
                         (A) post-retirement medical benefits to be                   
                    provided to covered employees (determined on the                  
                    basis of current medical costs) * * *                             
               We turn now to the initial dispute between the parties over            
          whether, in determining for each year at issue the Trust’s UBTI             
          under section 512(a)(3)(A), the amount of investment income at              
          issue that the Trust set aside (i.e., $1,580,455 for 1991 and               
          $1,155,793 for 199214) to provide for the payment of reasonable             
          costs of administration directly connected with providing for the           
          payment of health care benefits is subject to the limitation                
          prescribed by section 512(a)(3)(E)(i).  It is the position of the           


               14See supra notes 4, 8, and 10.                                        




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